E-Invoicing in Saudi Arabia:
ZATCA Clearance Mandate & Fatoora

Last update: 2026, October 21

Summary

Saudi Arabia is rolling out mandatory e-invoicing for B2G & B2B transactions, and mandatory e-reporting for B2C transactions. The framework relies on the Fatoora central platform and is being implemented in phases based on company revenue.

B2G & B2B Transactions

Partially mandatory e-invoicing

E-invoicing clearance required for all B2G & B2B transactions through a central platform (Fatoora) for businesses with an annual turnover exceeding 375K SAR (~89 K€), with further phases planned.

B2C Transactions

Partially mandatory e-reporting

E-reporting mandatory for all B2C transactions within 24 hours, through a central platform (Fatoora) for businesses with an annual turnover exceeding 375K SAR (~89 K€), with further phases planned.

What the Law Says

B2G & B2B E-Invoicing

Saudi Arabia has been rolling out a nationwide e-invoicing mandate since 2021, with clearance through the Fatoora central platform being introduced very gradually across multiple waves (currently at wave 24!).

The mandate is led by the Zakat, Tax and Customs Authority (ZATCA) and applies to “tax invoices”, i.e. B2G & B2B invoices.

Under this framework, companies must submit their tax invoices to ZATCA through the Fatoora central platform. Fatoora validates or “clears” each invoice by applying a digital signature. The validated invoice is then returned to the issuer, who is responsible for delivering it to the intended recipient.

For companies in the clearance phase, the required electronic invoice format is based on UBL 2.1 and relies on the European Norm (EN) 16931. Invoices may be issued either as standalone UBL XML files or as hybrid PDF documents (with the UBL XML invoice embedded).

The mandate has been deployed progressively since 2021, with a first phase focused on electronic invoice issuance by the suppliers. The second phase introduces mandatory transmission to Fatoora. It is being implemented in multiple waves [↗︎], the first of which began on January 1, 2023, initially applying to very large companies.

Since then, the eligibility thresholds have gradually been reduced. Following wave 23 [↗︎] at the beginning of 2026, the rollout has now reached wave 24, with wave 25 already announced and additional waves still to be confirmed.

The current implementation timeline is as follows:

Wave 24, from June 30, 2026: B2G & B2B e-invoicing clearance mandatory for companies with annual revenue subject to VAT above SAR 375K (~88 K€)
Wave 25, from February 1, 2027: B2G & B2B e-invoicing clearance mandatory for companies with annual revenue subject to VAT above SAR 187.5K (~44 K€)

Additionally, a grace period is currently in effect until December 31, 2026, but taxpayers must meet specific requirements to qualify for these penalty waivers.

Invoices must generally be archived for six years.

B2C E-Reporting

Saudi Arabia is very gradually introducing mandatory e-reporting of B2C transactions through the Fatoora central platform, with the rollout currently at wave 24!

The B2C requirements in Saudi Arabia follow the same general compliance framework as the B2B and B2G obligations, but differ in the timing of the data transmission to the tax authority.

B2C transactions are indeed usually more time-sensitive than B2B or B2G transactions, as the consumer is waiting for their document at the point of sale. They generally rely on “simplified tax invoices” and cannot be delayed by a real-time clearance process. To address this constraint, the B2C model follows an e-reporting process rather than a clearance mechanism.

In practice, the invoice issuer must generate a B2C simplified tax invoice containing a QR code and digital signature, and provide a printed version directly to the customer, without prior validation by the Zakat, Tax and Customs Authority (ZATCA).

The invoice must then be electronically reported to the Fatoora central platform within 24 hours, giving the tax authority near-real-time visibility while preserving operational speed at the point of sale.

The B2C reporting obligation is being rolled out in parallel with the B2B and B2G clearance requirements. It benefits from the same grace period until December 31, 2026, and follows the same wave-based implementation [↗︎]:

Wave 24, from June 30, 2026: B2C e-reporting is mandatory for companies with annual revenue subject to VAT above SAR 375K (~88 K€)
Wave 25, from February 1, 2027: B2C e-reporting becomes mandatory for companies with annual revenue subject to VAT above SAR 187.5K (~44 K€)

Invoices must generally be archived for six years.

Timeline

ZATCA mandate phase 1

E-invoice issuance becomes mandatory for B2G, B2B and B2C transactions

ZATCA mandate phase 2

B2G & B2B e-invoicing clearance, as well as B2C e-reporting start becoming mandatory, based on company size

Wave 23 (turnover > SAR 750K)

B2G & B2B e-invoicing clearance, along with B2C e-reporting mandatory for companies with annual revenue above SAR 750K

Wave 24 (turnover > SAR 375K)

B2G & B2B e-invoicing clearance, along with B2C e-reporting mandatory for companies with annual revenue above SAR 375K

End of the "Exemption of Fines" initiative

End of the financial penalties waiver for companies currently implementing the mandate

Wave 25 (turnover > SAR 187,5K)

B2G & B2B e-invoicing clearance, along with B2C e-reporting mandatory for companies with annual revenue above SAR 187,5K

Dec 4, 2021

Jan 1, 2023

Mar 31, 2026

Jun 30, 2026

Dec 31, 2026

Feb 1, 2027

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Technical Details (B2G & B2B)

B2G and B2B invoices within the scope of Saudi Arabia’s clearance obligation must be validated through the Fatoora central platform. Once cleared, the supplier is responsible for delivering the electronic invoice to the recipient.

E-invoicing central platform

Under Saudi Arabia’s B2G and B2B e-invoicing mandate, businesses that have entered phase 2 must submit their electronic invoices to the Fatoora central platform [↗︎], operated by ZATCA, Saudi Arabia’s tax authority.

The process follows a clearance model: each invoice must be validated by Fatoora before it can be delivered to the recipient.

The seller generates the electronic invoice using a compliant invoicing solution.
The invoice is submitted to Fatoora through an API. ZATCA validates it and applies a cryptographic stamp.
The cleared invoice is returned to the seller, who is responsible for delivering it to the buyer, either as a UBL XML file or as a PDF/A-3 document with the UBL XML invoice embedded.

Before submitting invoices, businesses must connect their invoicing solution to Fatoora through an onboarding process carried out on the Fatoora portal. ZATCA also provides an SME portal [↗︎] for eligible businesses that need an alternative solution and wish to issue their invoices manually through the portal.

Invoice format

Since Phase 1 of the ZATCA mandate, which came into force in December 2021 in Saudi Arabia, all invoices must be issued in electronic format.

And since Phase 2, they must comply with UBL 2.1, aligned with the European Norm (EN) 16931, and supplemented by additional local validation rules and technical extensions defined in the official invoice specifications [↗︎].

B2G & B2B invoices may be issued as:

Standalone UBL XML files
Hybrid PDF (PDF/A-3) documents combining a human-readable PDF with the embedded UBL invoice attached.

Proofs of invoice validation

Once a B2G or B2B invoice has been cleared, ZATCA applies a cryptographic stamp to the electronic invoice. This stamp serves as proof that the invoice has passed the clearance process.

The cleared invoice also contains a QR code, which allows the recipient to scan and check key invoice details. When the invoice is delivered as a hybrid PDF/A-3 document, the QR code must appear on the human-readable version.

Saudi e-invoicing solutions must also use hashing and chaining mechanisms: each invoice contains a digital fingerprint of the preceding invoice in the same sequence. This helps protect the sequence against tampering and strengthens traceability.

These security requirements are described in ZATCA’s Security Features Implementation Standards [↗︎].

Service providers qualification

Service providers can pass a qualification process from ZATCA and be listed in the official Solution Providers Directory [↗︎].

However, this qualification is not mandatory. It primarily serves as a recognition mechanism rather than a compliance requirement.

Service providers may offer e-invoicing solutions in Saudi Arabia as long as their solutions comply with ZATCA’s technical and regulatory requirements, even if they are not officially qualified or listed in the directory.

Exemption of Fines initiative

On June 30, 2026, ZATCA extended its financial penalties waiver initiative until December 31, 2026 in Saudi Arabia.

The measure provides temporary relief from certain penalties related to VAT and e-invoicing compliance, including late registration, late filing, and delays linked to technical integration, provided taxpayers regularize their situation and settle any outstanding principal tax liabilities.

The waiver does not apply to penalties related to tax evasion or to penalties that were already paid before the initiative took effect. It is intended to support companies as they complete their onboarding to the phased rollout of the national clearance-based e-invoicing system.

Technical Details (B2C)

B2C invoices within the scope of Saudi Arabia’s phase 2 must be reported to the Fatoora central platform. Suppliers issue simplified tax invoices directly to consumers and submit them to ZATCA within 24 hours.

E-invoicing central platform

Under Saudi Arabia’s B2C e-invoicing mandate, businesses that have entered phase 2 must submit their simplified tax invoices to the Fatoora central platform [↗︎], operated by ZATCA, Saudi Arabia’s tax authority.

Unlike B2G and B2B invoices, B2C invoices follow an e-reporting model and do not require clearance before they are delivered to the customer:

The seller generates a simplified tax invoice using a compliant invoicing solution, which applies a cryptographic stamp and generates a QR code
The seller provides the customer with a readable version, either printed or, if agreed by the parties, in PDF or electronic format
The invoice must be submitted to Fatoora in XML format within 24 hours of issuance

Businesses can connect their invoicing solution to Fatoora through an API. ZATCA also provides an SME portal [↗︎] for eligible businesses that wish to issue their invoices manually.

Invoice format

Since phase 1 of the ZATCA mandate, which came into force in December 2021, businesses within scope have been required to issue invoices in electronic format.

For businesses in phase 2, invoices must follow Saudi Arabia’s UBL 2.1 specifications, which are aligned with EN 16931 and supplemented by local validation rules and technical extensions. These requirements are described in the official invoice specifications [↗︎].

For B2C transactions, simplified tax invoices must be generated and stored as either:

A standalone UBL XML file
A PDF/A-3 document with the UBL XML invoice embedded

The invoice must include a QR code, generated by the supplier’s invoicing solution, which allows the customer to scan and check key invoice details. When a readable version is provided to the customer, the QR code must appear on that version.

The electronic invoice is then submitted to Fatoora in XML format, within 24 hours of issuance.

Service providers qualification

ZATCA provides an official Solution Providers Directory [↗︎].

For more information, refer to the section above: “Technical Details (B2G & B2B)”

Exemption of Fines initiative

On June 30, 2026, ZATCA extended its financial penalties waiver initiative until December 31, 2026.

For more information, refer to the section above: “Technical Details (B2G & B2B)”

The Invoicing Hub Word

Saudi Arabia

Saudi Arabia has taken a highly gradual approach to e-invoicing, introducing requirements step by step to give businesses time to adjust.

A central feature of this approach is the use of two distinct models: clearance for B2G and B2B transactions and e-reporting for B2C transactions. This distinction reflects practical constraints, particularly in retail environments where invoices must be issued almost immediately.

The rollout has been organised across multiple phases and waves, supported by a fines exemption initiative providing relief from certain penalties for eligible businesses.

Phase 1 focused on the introduction of electronic invoicing, with an emphasis on digitisation and automation benefits for businesses. Phase 2 shifted towards enhanced tax reporting and administrative oversight. This progression reflects the tax authority’s effort to balance regulatory objectives with operational feasibility while improving efficiency.

The Saudi rollout is also notable for its unusually high number of implementation waves, currently reaching waves 24 and 25 (!). This level of granularity is uncommon in other jurisdictions, where implementation is generally organised around a small number of deadlines based on company size.

While further waves are expected to bring smaller businesses into scope, a large part of the economy is already covered, and the mandate is now broadly in effect.