Saudi Arabia’s Fatoora e-invoicing framework, first announced in 2020 and managed by the Zakat, Tax and Customs Authority (ZATCA), is a core pillar of the Kingdom’s Vision 2030 digital strategy.
Following Phase 1 (the “Generation Phase”), which began on December 4th, 2021, implementation transitioned to a progressive Phase 2 rollout starting on January 1, 2023. A key characteristic of Saudi Arabia’s e-invoicing mandate, compared with many other countries, is the highly gradual nature of its implementation. The country is now reaching Wave 24 (!!), representing another integration wave that brings additional VAT-registered SMEs within the scope of the mandate. At the same time, the newly announced Wave 25 [↗︎] further lowers again the annual revenue threshold to extend compliance requirements.
These ongoing developments coincide with key milestones regarding the penalty grace period, which faced a last-minute extension decision by ZATCA
New six-month extension of the grace period
Following an earlier extension that granted penalty relief from January 1 through June 30, 2026, ZATCA issued a last-minute official communication on June 30 [↗︎] announcing that the Minister of Finance approved a second six-month extension of the “Cancellation of Fines and Exemption of Financial Penalties Initiative.” This pushes the final grace period deadline to December 31, 2026, with ZATCA urging all taxpayers to take advantage of the program before it expires.
To qualify for these penalty waivers, taxpayers must maintain an active registration with ZATCA, submit any unfiled returns, and pay off all principal tax debts in full, which can be done either in a single payment or by setting up a formal ZATCA instalment plan.
ZATCA also explicitly clarified that the amnesty does not apply to all fines.
Wave 24 targeting SMEs fully implemented
Following the completion of Wave 23 on March 31, 2026, which integrated taxpayers with annual revenue exceeding SAR 750,000 (~ EUR 172 500), Wave 24 of ZATCA’s Phase 2 integration officially entered active enforcement on July 1, 2026.
This follows the September 26, 2025 official announcement [↗︎] of the threshold for taxpayers who had to integrate their e-invoicing solutions with the Fatoora platform by June 30, 2026.
By setting the revenue threshold, for Wave 24, at SAR 375,000 (~ EUR 88,000) for 2022, 2023, or 2024, the mandate now concerned small and medium enterprises across the Kingdom, while very small enterprises are still out of scope, for now.
New Wave 25 announced, targeting micro-enterprises
Just after Wave 24 deadline was met, ZATCA officially announced on July 24, 2026 [↗︎] the selection criteria for Wave 25 of the Integration Phase. This new wave targets all VAT-registered taxpayers whose annual taxable revenues exceeded SAR 187,500 (~EUR 44,000) during 2022, 2023, 2024, or 2025.
Taxpayers falling under Wave 25 will be formally notified by ZATCA and must link and integrate their e-invoicing solutions with the Fatoora platform no later than February 1, 2027.
By lowering the threshold to SAR 187,500, ZATCA extends the Phase 2 requirements to additional very small enterprises, bringing the Kingdom one step closer to full digital integration across its entire business landscape.
