ZATCA wave 25: Phase 2 e-invoicing reaches businesses above SAR 187,500

On 24 July 2026 Saudi Arabia's Zakat, Tax and Customs Authority (ZATCA) announced the criteria for the 25th wave of the e-invoicing Integration Phase — Phase 2 — and it reaches much further down the market than any wave before it.

What ZATCA announced

Taxpayers in the wave are notified by ZATCA, but the test is revenue in any one of four years, so a business that crossed the threshold once in 2022 and has been below it since is still in scope. Wave 25 is also the first to count 2025 revenue.

How it compares with wave 24

SAR 187,500 is the voluntary VAT registration threshold, so in practice this wave reaches most VAT-registered small businesses that were not already covered — many of them using simpler billing tools that were never built to integrate with Fatoora.

How to prepare

• Check every year, not just the last one. Pull VAT-able revenue for 2022 to 2025 and compare each to SAR 187,500.
• Confirm your invoicing software can integrate. Phase 2 means invoices are reported to or cleared by Fatoora, not simply generated with a QR code. Ask your provider for a date, in writing.
• Clean the customer master. VAT numbers and addresses for business customers are required fields; gaps found in January are much harder to fix than gaps found now.
• Work backwards from 1 February 2027. Leave time for onboarding and testing; the period around year end is already the busiest of the year for most finance teams.

The half e-invoicing does not cover

E-invoicing standardises what you bill. It says nothing about what was actually paid. Matching collections in the bank to the invoices they settle — and finding the ones that were never paid — stays a reconciliation job, and in Saudi Arabia it usually starts with a bank statement that is in Arabic or bilingual.

That is the part BankXL handles. It is not an e-invoicing solution and does not connect to Fatoora. What it does is turn Saudi bank statements into Excel — Arabic headings and narrations read in the right order, a Hijri date column never mistaken for the transaction date, SAR carried through — with every row checked against the running balance on the statement. From there, invoice matching pairs deposits with open invoices in the same workbook. See the Arabic page or the pages for Al Rajhi and SNB.

Sources

• ZATCA — announcement of the 25th wave
• EY Tax News — Saudi Arabia announces 25th wave of Phase 2 e-invoicing integration

This post reports an announcement and is not tax advice. ZATCA notifies taxpayers in each wave directly; confirm your own status with ZATCA or your adviser.