ZATCA Wave 25: who is in scope, and what is due by 1 February 2027

If your revenue subject to VAT passed SAR 187,500 in any one of 2022, 2023, 2024 or 2025, you are in Wave 25 of ZATCA’s e-invoicing integration phase, and your invoicing system has to be linked to the Fatoora platform by 1 February 2027. ZATCA published the selection criteria on 24 July 2026 and says it will notify every business in scope directly.

Zakat, Tax and Customs Authority, Wave 25 selection criteria, 24 July 2026.

That threshold is half of Wave 24’s SAR 375,000. It is also the point at which VAT registration in the Kingdom stops being mandatory and becomes optional, so Wave 25 reaches close to the floor of the VAT register.

Threshold: Zakat, Tax and Customs Authority, Wave 25 selection criteria, 24 July 2026. Registration thresholds: ZATCA, VAT registration.

Three things decide it, and you can check all three yourself without waiting for a letter.

• Your revenue subject to VAT exceeded SAR 187,500 in at least one of 2022, 2023, 2024 or 2025. One year over the line is enough; it does not have to be the most recent one.
• You are a taxable person resident in the Kingdom. Taxable persons who are not residents are not required to issue electronic invoices for supplies taxable in Saudi Arabia.
• You are not already integrated under an earlier wave. Every wave since the first has used a higher revenue threshold, so businesses above SAR 375,000 were brought in before this one.

Threshold and years: Zakat, Tax and Customs Authority, Wave 25 selection criteria, 24 July 2026. Residence: Zakat, Tax and Customs Authority, E-Invoicing Detailed Guideline, version 2, May 2023.

Phase 1, the generation phase, asked you to stop writing invoices by hand: produce them electronically, in any format you liked, with a fixed set of fields. Phase 2 is a different kind of requirement. Your system stops being the only party to the invoice and starts talking to ZATCA’s.

Zakat, Tax and Customs Authority, E-Invoicing Detailed Guideline, version 2, May 2023.

• Invoices are generated in XML, or in PDF/A-3 with the XML embedded. XML is what goes to ZATCA.
• Standard tax invoices — the ones you issue to another business or to government — go to Fatoora for clearance before you send them to the buyer. ZATCA validates the invoice, applies its cryptographic stamp and a QR code, and returns the cleared XML.
• Simplified tax invoices — the ones you issue to a consumer — are stamped by your own solution, carry a QR code, and are reported to Fatoora within 24 hours of issue.
• Every invoice carries a UUID and a hash, and each one is chained to the one before it through a previous-invoice-hash field.
• Your solution is registered on the Fatoora portal, and it must not let anyone reset the invoice counter, change the system clock, export the stamping key, or delete or alter an invoice once it is issued.

Zakat, Tax and Customs Authority, E-Invoicing Detailed Guideline, version 2, May 2023.

The requirements are set out field by field in what ZATCA Phase 2 integration actually requires, which is the companion to this article.

ZATCA treats e-invoicing breaches as field violations, and its published schedule begins with a notice rather than a fine. The taxpayer is alerted to the violation and given up to three months to correct it. If the same violation is repeated, the penalty escalates: SAR 1,000, then SAR 5,000, then SAR 10,000, then SAR 40,000 for a fourth repeat and beyond. Twelve months without a repeat ends the cycle, and the same violation found after that starts again at a notice.

Zakat, Tax and Customs Authority, Simplified Guide: the decision to reclassify VAT field violations, 30 January 2022.

The e-invoicing violations on that schedule include not issuing and keeping invoices and notes electronically, not keeping them in the format the system requires, failing to tell ZATCA about a malfunction that stops invoices being issued, omitting the QR code, including a prohibited function in the invoicing system, deleting or amending an invoice after issue, and any other breach of the VAT law or its regulations.

Zakat, Tax and Customs Authority, Simplified Guide: the decision to reclassify VAT field violations, 30 January 2022.

1. Pull your VAT-taxable revenue for each of 2022, 2023, 2024 and 2025 and compare it to the threshold. If any single year is over, plan on being in scope.
2. Establish whether the system you invoice from today can produce a compliant XML invoice at all, or only a PDF. This one answer decides whether the next twelve months are a configuration exercise or a replacement.
3. Ask your software vendor in writing whether their product is compliant for the integration phase, not only for the generation phase, and what their Fatoora onboarding path is.
4. Onboard each solution on the Fatoora portal: log in with your ERAD credentials, request an OTP for the solution, enter it in the solution, and confirm that it onboarded.
5. Run real invoices through clearance and reporting months before the deadline — including the failure cases. ZATCA publishes the expected behaviour when its servers are unreachable or your connection is down, and that behaviour has to be built, not improvised on the day.

Onboarding steps and failure scenarios: Zakat, Tax and Customs Authority, E-Invoicing Detailed Guideline, version 2, May 2023.

If invoices are assembled from a spreadsheet, or from a system that cannot emit XML, then Phase 2 is not a change to the invoice. It is a change to where the invoice comes from: prices, tax treatment, customer records and stock movements all have to be right in one place, at the moment of issue, because there is no longer a person between the system and the regulator.

Nizamics has ZATCA Phase 2 e-invoicing running in production — cryptographic stamping, QR codes and reporting to ZATCA’s platform — and builds that compliance layer into every ERP implementation from the start. How we implement ERP sets out what that involves and what it costs you in time. The FAQ covers the questions that come before that. If you want a straight answer about where you stand against 1 February 2027, tell us what you invoice from today.