1 May 2026

ZATCA Phase 2 E-Invoicing: A Complete Guide for Saudi Businesses

Everything you need to know about Phase 2 requirements, the wave rollout schedule, and how to prepare your business

What Is ZATCA E-Invoicing?

Saudi Arabia’s Zakat, Tax and Customs Authority (ZATCA) launched its mandatory e-invoicing system in two phases:

  • Phase 1 (Generation): Started December 2021. Businesses must generate and store invoices in XML format with a QR code.
  • Phase 2 (Integration): Requires real-time integration with ZATCA’s Fatoora platform — every invoice must be cleared or reported before it reaches the buyer.

The Key Difference Between Phase 1 and Phase 2

In Phase 1, generating a correctly formatted invoice was enough. Phase 2 changes the game: invoices must pass through ZATCA’s platform first and receive a cryptographic stamp before they are legally valid. An invoice without ZATCA clearance cannot be used in a business transaction.

This means your invoicing system must:

  1. Be connected to the internet and integrated with the Fatoora API
  2. Handle connectivity interruptions gracefully and resume submission
  3. Hold a valid Cryptographic Stamp Identifier (CSID) issued by ZATCA

Wave Rollout Schedule

ZATCA is rolling out Phase 2 in waves, targeting businesses by revenue bracket. Early waves covered the largest taxpayers; subsequent waves progressively include smaller businesses. Check ZATCA’s official portal to confirm which wave applies to your organization — or contact us and we will look it up for you.

What Are the Penalties for Non-Compliance?

Penalties for non-compliance can reach SAR 50,000 per violation, along with elevated tax audit risk. Invoices issued without ZATCA clearance are legally invalid, which can void business transactions and trigger disputes with clients.

How Odoo Handles ZATCA Compliance

Odoo’s Accounting module includes native ZATCA Phase 2 support. It generates correctly structured XML invoices, adds the required QR code, and communicates directly with the Fatoora API — no middleware or third-party software needed.

At AlAfaq Alamiah, we handle the full compliance setup:

  • Configuring Odoo for complete Phase 1 and Phase 2 compliance
  • Obtaining your CSID from ZATCA on your behalf
  • Testing the full Fatoora integration before go-live
  • Training your team on the updated invoicing workflow

Do not wait until the last wave — contact us to get started.

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