Wave 25 of ZATCA's Phase 2 e-invoicing programme was announced on 24 July 2026 and pulls in any VAT-registered business whose VAT-taxable revenue exceeded SAR 187,500 in any single year from 2022 through 2025. Those businesses must be integrated with the Fatoora platform by 1 February 2027. That threshold is half of Wave 24's and it is the same number as the mandatory VAT registration threshold, which means Wave 25 is effectively the wave where "every VAT-registered business in Saudi Arabia" becomes the answer. If you register for VAT, you are now on the e-invoicing path.
Deadline: 1 February 2027 for Wave 25. ZATCA notifies affected taxpayers directly at least six months in advance — but the criteria are public, so you can work out your own position today rather than waiting for the letter.
Am I in Wave 25?
Two conditions, both of which have to be true:
- You are registered for VAT in Saudi Arabia.
- Your VAT-subject revenue exceeded SAR 187,500 in 2022, 2023, 2024 or 2025 — any one of those years is enough.
The second condition catches businesses that have since shrunk. If 2023 was a strong year at SAR 400,000 and 2025 came in at SAR 150,000, you are still in Wave 25. The test looks backwards at your best year in the window, not at where you are now.
Here is how the recent waves stack up, which is the fastest way to check whether you were already caught by an earlier one:
| Wave | Revenue threshold (any year 2022–2025) | Integration deadline |
|---|---|---|
| Wave 23 | Over SAR 750,000 | 31 March 2026 |
| Wave 24 | Over SAR 375,000 | 30 June 2026 |
| Wave 25 | Over SAR 187,500 | 1 February 2027 |
If you crossed SAR 375,000 in any of those years, your deadline was 30 June 2026 and enforcement has been live since 1 July 2026 — Wave 25 is not your wave and you are already late. Penalties across the Phase 2 regime run from SAR 5,000 to SAR 50,000 depending on the violation.
Phase 1 versus Phase 2: what actually changes
Phase 1 (generation) has applied to everyone since December 2021 and is mostly about format: electronic invoices, no handwritten or scanned-image invoices, Arabic present, and a QR code on simplified invoices. If you already invoice from software, you are probably compliant with Phase 1 without having thought about it.
Phase 2 (integration) is about connection. Your invoicing system has to talk to ZATCA's Fatoora platform for every invoice you issue:
- Standard invoices (B2B, B2G) go for clearance — they are sent to ZATCA and returned cleared before you send them to the customer. An uncleared standard invoice is not a valid tax invoice.
- Simplified invoices (B2C) are reported to ZATCA within 24 hours of issue. The customer gets theirs immediately; the reporting happens behind them.
Technically, that means each invoice must be produced as UBL 2.1 XML (or PDF/A-3 with the XML embedded), carry a UUID, a cryptographic stamp and a hash chaining it to the previous invoice, include a compliant QR code, and travel over an authenticated API connection to Fatoora. None of that is something you assemble by hand — it is a property of the software you invoice from.
The five things a small business actually has to do
1. Confirm your wave and write the date down. Check your VAT-taxable revenue for 2022 through 2025 against the table above. Do this from your VAT returns, not from memory: the figure that matters is taxable supplies, not total bank deposits.
2. Decide how you will connect. Realistically there are three routes for a business under SAR 5 million in revenue:
| Route | What it is | Typical cost | Fits |
|---|---|---|---|
| Compliant invoicing software | You invoice from a system that is itself integrated with Fatoora | Monthly subscription, roughly SAR 70–350/month for SME plans | Most small businesses |
| E-invoicing middleware | A specialist service sits between your existing system and ZATCA | Per-invoice or tiered fee | You have a system you cannot replace |
| Build it yourself | Your developer implements the ZATCA SDK against Fatoora | Weeks of engineering, plus maintenance | Almost nobody at this size |
3. Clean up your customer data before you connect, not after. Phase 2 rejects invoices with missing or malformed mandatory fields, and the most common gaps at small companies are the buyer's VAT number on B2B invoices, the buyer's address, and Arabic descriptions. Fixing 200 customer records in November is an afternoon; fixing them while clearance is failing in February is a crisis.
4. Separate your standard and simplified flows. If you sell both to businesses and to consumers, you have two different obligations running at once — pre-clearance on one, 24-hour reporting on the other. Make sure whoever issues invoices knows which is which, because the difference is whether an invoice can be handed over before ZATCA responds.
5. Test in ZATCA's sandbox before the deadline. Onboarding involves generating a cryptographic stamp identity and passing compliance checks. Leave a month for it. The failure mode is not a rejected application — it is a week of unbilled work while someone gets certificates working.
What it costs, honestly
For a business at the Wave 25 end of the scale, e-invoicing compliance is a software subscription, not a project. Saudi-focused platforms sit in a fairly narrow band: Zoho Books starts around SAR 69/month, Wafeq's plans start around SAR 159/month, Qoyod publishes a single plan around SAR 199/month. Middleware and per-invoice pricing can be cheaper at very low volumes and rapidly stops being cheaper above a few hundred invoices a month.
Add to that a one-off cost that nobody quotes you: the hours spent cleaning customer records, agreeing Arabic product descriptions, and re-training whoever writes invoices. Budget a couple of days.
A month-by-month plan to 1 February 2027
| When | What to do |
|---|---|
| September–October 2026 | Confirm your wave from VAT returns. Shortlist two or three compliant systems and run a trial with your own data. |
| November 2026 | Clean customer records: VAT numbers, addresses, Arabic names and descriptions. Decide your standard vs simplified flows. |
| December 2026 | Onboard and test in the sandbox. Generate the stamp identity, run compliance checks, issue test invoices of both types. |
| January 2027 | Run parallel for a few weeks — issue real invoices through the new system while the old process is still available. Train the team. |
| 1 February 2027 | Live. Old system read-only. |
The parallel-running month is the part people skip and the part that saves them. It is also the natural moment to reconcile: the invoices in the new system for January should tie exactly to the sales in your books for January.
From the platform: Staks handles the accounting side of this — VAT at 15% on documents, customer records with VAT numbers, multi-currency SAR/AED/USD with the rate stored per transaction, and every invoice posting into a real double-entry ledger so the VAT return reconciles to the books rather than to a spreadsheet. To be straight with you: Staks is not a ZATCA-accredited e-invoicing solution and does not clear invoices through Fatoora today — e-invoicing integration is on the roadmap, not in the product. If you are in Wave 25, choose your clearance route on its own merits; what Staks gives you is clean books, VAT-ready records and the reporting behind them.
Frequently asked questions
What happens if I miss 1 February 2027?
Phase 2 violations carry penalties between SAR 5,000 and SAR 50,000. The more immediate problem is commercial: an uncleared standard invoice is not a valid tax invoice, so a corporate customer's finance team can reject it and your payment terms restart.
Do I need Arabic on my invoices?
Yes. Arabic is mandatory on tax invoices in Saudi Arabia; you may include another language alongside it. Practically, that means your product and service descriptions need agreed Arabic wording stored in your system, not translated ad hoc by whoever raises the invoice.
Does Phase 2 apply to invoices I issue to customers outside Saudi Arabia?
Export sales are still invoices issued by a Saudi VAT-registered person and go through the same generation and integration rules, even where the supply is zero-rated. Zero-rated is not the same as out of scope.
I am VAT-registered but tiny. Is there any exemption?
Non-resident taxpayers are outside Phase 2, but there is no general small-business exemption. With Wave 25 set at the same SAR 187,500 mark as mandatory VAT registration, the practical answer is that registration and e-invoicing now arrive together.
Can I keep issuing invoices from Excel until the deadline?
Until your integration date, Phase 1 rules apply — which already rule out handwritten and scanned invoices, and require a QR code on simplified invoices. An Excel template that is printed and signed has not been compliant since 2021.
Related reading
- ZATCA e-invoicing for small businesses — the fuller Phase 1 and Phase 2 explainer.
- How to invoice as a freelancer in Saudi Arabia — the freelance-permit and VAT angle.
- Quote vs invoice in the Gulf — which document does what, and when the tax point starts.
Wave 25 is the wave that ends the idea of e-invoicing as a large-company problem. The businesses that will find February easy are the ones that pick a route in October and spend November on their customer data. Start a 14-day free trial of Staks to get the books and VAT records in order while you do it.