Wave 4 of the Zakat, Tax, and Customs Authority electronic invoicing implementation started on Oct 1, 2023. It expanded the compliance framework for businesses with revenues over SAR 150,000,000. Wave 4 o phase 2 is for VAT-registered Saudi Arabian taxpayers whose turnover was between SAR 150 and SAR 250 millions in 2021 or 2022. These businesses will be required to integrate their electronic-invoicing solution with the Fatoora Portal starting on 1st Nov 2023.
The Next Waves of Phase 2
ZATCA also released details on future waves including target turnover thresholds and deadlines for integration.
Wave 16: Companies that have a turnover greater than 3 million SAR for 2022 or 2030 are required to be integrated by April 1, 2020.
Wave 17: The organizations generating revenue greater than SAR 2.5 million in the period 2022-2030 should integrate by July 31st 2025.
Wave 18: Companies which have a turnover of more than 2 million SAR for the year 2022 or 2030 are supposed to integrate by 31st August 2025.
Compliance requirements for Phase 2
Phase 2 of electronic invoicing introduces stricter measures for compliance to improve transparency and digital integration.
- Integration of Fatoora Portal Businesses must integrate their billing systems directly with ZATCA’s platform.
- Enhanced invoice details: Additional fields are required to be included on invoices in accordance with ZATCA guidelines .
- Specific Formats E-invoices are required to adhere to the digital format approved.
ZATCA informs businesses at least six-months before the deadline for integration.
The previous waves in Phase 2
ZATCA rolled out Phase 2 in waves to gradually expand compliance for various taxpayer segments:
- Wave 1: Businesses with turnover exceeding SAR 3 billion started integration on 1st January 2023.
- Wave 2: Businesses with turnover between SAR 500 million and SAR 3 billion began integration on 1st July 2023.
- Wave 3: Businesses with turnover between SAR 250 million and SAR 500 million started integration on 1st October 2023.
The Success of Phase 1
The first phase of electronic invoicing was implemented on the 4th December 2020 and achieved important milestones.
- Handwritten or text-edited bills are prohibited.
- Mandating the use of e-invoicing software that is ZATCA compliant.
- Requirements for QR codes and invoice storage regulations.
These measures improved consumer protection, and made taxpayers aware of the importance of digital invoicing.
Wave 4 highlights Saudi Arabia’s commitment to digital transformation and transparency. It also ensures that businesses are prepared for the future of electronic invoicing and for the next wave called wave 5.