Saudi businesses included in ZATCA E-Invoicing Wave 25 need to prepare for Phase Two of the Kingdom’s electronic invoicing programme before the 1 February 2027 integration deadline. Wave 25 covers taxpayers whose revenues subject to VAT exceeded SAR 187,500 during 2022, 2023, 2024 or 2025 and who are targeted and notified by the Zakat, Tax and Customs Authority.
For affected businesses, compliance involves more than continuing to generate electronic invoices. Their invoicing solutions must be ready for integration with ZATCA’s Fatoora Platform and must meet the technical and data requirements of the Integration Phase.
The February 2027 deadline may appear to leave several months for preparation, but the actual project can involve ERP configuration, invoice-field mapping, master-data cleanup, software upgrades, API integration, onboarding, testing and staff preparation. Businesses that rely on several invoicing systems, POS platforms, branches or legacy accounting software can face additional complexity. Wave 25 should therefore be treated as a structured finance-and-technology project rather than a last-minute software update.
Who Is Included in ZATCA E-Invoicing Wave 25?
ZATCA announced Wave 25 on 24 July 2026. The selection criterion covers taxpayers whose revenues subject to VAT exceeded SAR 187,500 in any of the years 2022, 2023, 2024 or 2025. ZATCA will notify targeted taxpayers and requires their e-invoicing solutions to be integrated with Fatoora by no later than 1 February 2027.
Businesses should pay close attention to the wording of the threshold. The test is not based only on current 2026 turnover. Revenue from each of the specified years may be relevant, so a company that exceeded SAR 187,500 in one qualifying year may fall within the Wave 25 criterion even if its revenue was lower in another year.
The business should also verify its official ZATCA notification and taxpayer information. Internal estimates can help identify likely exposure, but formal preparation should be aligned with the taxpayer’s actual status and applicable ZATCA requirements.
Why Phase One Compliance Is Not Enough
Saudi Arabia introduced Phase One of electronic invoicing on 4 December 2021. That stage required taxpayers within scope to generate and store compliant electronic invoices and electronic notes using an appropriate e-invoicing solution rather than handwritten invoices or invoices created through basic text-editing or spreadsheet software.
Wave 25 concerns Phase Two, known as the Integration Phase. This introduces additional requirements, including integration between the taxpayer’s e-invoicing solution and the Fatoora Platform, additional invoice fields and specified electronic invoice formats.
A company may therefore already be issuing compliant electronic invoices under Phase One and still have substantial work remaining before Phase Two. Existing software must be assessed against Integration Phase requirements rather than assumed to be ready simply because it currently creates electronic invoices.
What Changes Under the Integration Phase?
Phase Two changes electronic invoicing from a primarily internal generation process into an integrated digital workflow involving ZATCA. The taxpayer’s solution needs to generate invoices according to the required format and communicate with Fatoora through the applicable integration process.
Tax invoices under Phase Two must be generated in the required electronic format, which can include XML or PDF/A-3 with embedded XML according to the applicable requirements. For submission to Fatoora, tax invoice data is handled in XML through the integration process.
The system must also include the additional required invoice fields and support the technical and security requirements defined for the Integration Phase. This means the project can affect more than the invoice template that users see on screen. Data structures, ERP fields, system interfaces and transaction workflows may also need to change.
Clearance and Reporting Need Different Workflows
Businesses preparing for ZATCA integration need to understand the difference between clearance and reporting because the required process depends on the invoice type.
Standard tax invoices, commonly associated with business-to-business transactions, are subject to clearance. The relevant electronic invoice is submitted to Fatoora for validation before it is shared with the buyer under the applicable process. The platform performs validation and returns the cleared invoice when the requirements are satisfied.
Simplified tax invoices, which are commonly used for business-to-consumer transactions, follow a reporting process rather than the same pre-clearance model. This creates different technical and operational requirements for businesses that issue both invoice types.
A company with retail branches, B2B sales and online transactions may therefore need more than one invoice flow. The e-invoicing architecture should reflect the transactions the organisation actually processes rather than treating every invoice identically.
Start Wave 25 Preparation With an Invoice-System Audit
The first practical step is to identify every system that creates invoices or electronic notes. In some organisations, all invoices are generated through one ERP. In others, invoices may originate from an accounting platform, POS terminals, e-commerce systems, branch applications or specialist billing software.
Every relevant source needs to be included in the assessment. If head office is compliant but a branch still issues invoices through a separate application that has not been integrated, the organisation may still have a significant readiness gap.
The system audit should establish which application creates each invoice type, where customer and VAT data comes from, how invoice numbers are generated, how credit and debit notes are handled and which systems need to communicate with the Fatoora Platform.
Check Whether Your Existing Software Is Phase Two Ready
Not every business needs to replace its current ERP or accounting platform. Existing software may already support ZATCA integration, may require an upgrade or may be connected through a suitable middleware or e-invoicing solution.
Businesses should ask the software provider specific questions rather than accepting a general statement that the product is “ZATCA compliant.” The provider should be able to explain how the system generates the required structured invoice data, handles onboarding, communicates with Fatoora, processes responses and manages failed transactions.
The business should also confirm whether required updates are included in the existing software agreement or require a separate implementation project. Vendor availability can become an important constraint as the February deadline approaches, particularly when many taxpayers are preparing simultaneously.
Master Data Needs to Be Clean Before Integration
Many ZATCA integration problems begin with data rather than connectivity. Electronic invoices depend on information stored across customer records, product or service masters, VAT configuration and transaction records. If those records are incomplete or inconsistent, the resulting invoice can fail validation or require repeated manual intervention.
Businesses should review customer legal details, VAT registration information where applicable, addresses, product and service descriptions, tax categories, units of measure, discounts, charges, invoice sequencing and branch information before full testing starts. Credit and debit note logic should also be checked because those transactions need to remain linked correctly to the underlying commercial process.
The objective is to confirm that every required invoice field can be produced reliably from the source systems. Manual correction of the same missing information on every transaction is a sign that the underlying process is not ready.
ERP Integration Is a Major Part of Fatoorah Compliance
For businesses using ERP systems, ZATCA integration should be connected to the normal transaction lifecycle. The invoice should originate from validated customer, sales, tax and accounting data rather than being recreated separately for compliance.
A connected architecture can allow the ERP to provide the required transaction information to the e-invoicing solution, which then communicates with Fatoora according to the applicable process. Responses can be returned to the business system so invoice status is visible to finance and operations.
This approach reduces duplicate data entry and helps preserve the link between the original transaction and the electronic invoice submitted through the compliance process. Businesses already investing in ERP integration or finance automation can therefore consider ZATCA automation as part of the wider systems architecture rather than as an isolated regulatory connector.
Your E-Invoicing Software Needs Internet Connectivity
Phase Two requires integration with the Fatoora Platform, so the relevant e-invoicing solution must be able to connect to the internet and communicate according to ZATCA’s integration requirements.
Businesses should review the reliability of connectivity at every location that participates in the invoicing process. A head office with stable connectivity does not automatically solve the problem for remote branches or sites that generate invoices independently.
The operational design should also consider what employees are expected to do when connectivity is disrupted. The correct handling depends on the invoice type, system design and applicable technical requirements, so exception procedures should be defined and tested before production go-live rather than invented during an outage.
Onboarding Is Part of the Integration Process
Businesses also need to account for onboarding their compliant e-invoicing solution or relevant solution units or devices with Fatoora. ZATCA’s guidance includes onboarding steps involving the Fatoora portal and generation of an OTP code for the relevant solution unit or device.
The exact implementation should be coordinated with the organisation’s solution provider and internal technical team. Businesses with multiple devices or invoice-generating systems need to understand how their environment will be onboarded and managed after go-live.
Credentials, access responsibilities and system ownership should be documented. Compliance should not depend on one employee being the only person who knows how the production integration is configured.
Test More Than One Successful Invoice
A successful test invoice confirms only that one transaction worked. It does not prove that the business is operationally ready for Wave 25.
Testing should cover the normal invoice types the business actually issues, along with less frequent situations that could create problems after go-live. Relevant cases may include tax invoices, simplified invoices where applicable, credit notes, debit notes, discounts, different VAT treatments, customer-record exceptions and corrections.
The project team should also test what happens when information is missing or invalid. A good readiness test answers not only whether Fatoora accepts a correct transaction but also whether employees know what to do when it does not.
Finance users should be able to understand whether a failed invoice is caused by customer data, VAT configuration, invoice formatting or a technical integration problem. Otherwise every exception becomes dependent on IT or an external software vendor.
Build an Exception-Management Process Before Go-Live
Electronic invoicing automation should reduce manual work, but no production integration should assume every transaction will always succeed.
An invoice may fail because a required field is missing, a source record is incorrect, the system generates an invalid value or a technical communication problem occurs. The business needs a controlled way to identify these failures, determine the cause and resolve them.
Error logs should therefore be accessible to the teams responsible for support. Repeated failures should be investigated as a root-cause problem rather than corrected individually forever.
A good ZATCA automation workflow should make unsuccessful transactions visible quickly and route them to the appropriate owner. This is particularly important for businesses processing large invoice volumes where a small configuration problem could affect many transactions before someone notices.
Finance, IT and Operations Need to Work Together
Wave 25 is not solely a finance project or solely an IT project. Finance understands VAT treatment, invoices and accounting requirements. IT understands applications, credentials, infrastructure and connectivity. ERP or software teams understand configuration, while operations understands how transactions actually happen across branches and departments.
Successful preparation needs all of these perspectives. Finance should validate invoice treatment and required business information, technology teams should manage integration and security, and business users should test whether the final process works under real operational conditions.
The organisation should also assign an overall project owner. Without clear responsibility, finance may assume the software vendor is handling a requirement while the vendor assumes internal IT or tax teams are responsible for it.
October 2026 Is the Right Time to Move From Planning to Execution
Wave 25 taxpayers working toward the 1 February 2027 deadline should already be moving beyond initial awareness.
During October and November 2026, businesses should confirm scope, review notifications, identify invoice-generating systems, assess software readiness and resolve major vendor decisions. Master-data issues should also be identified early because cleanup can take longer than expected.
November and December should focus on configuration, integration, invoice-field mapping and onboarding activities. Testing should begin as soon as enough of the environment is ready rather than waiting until the complete project is finished.
December 2026 and January 2027 should be used for wider scenario testing, user acceptance, error correction, staff preparation and production-readiness checks. January should not become the month when the organisation first starts mapping its systems.
Avoid Treating the February Deadline as the Project Finish Line
The objective is not simply to have an API connection operating on 1 February. The business needs a stable invoicing process that employees can continue operating after the implementation team steps away.
Before go-live, staff should know how to identify invoice status, respond to validation problems and escalate technical failures. The organisation should know who manages the integration after deployment and how software updates will be handled.
Monitoring should also continue after go-live. Transaction failures, unusual error rates and connectivity issues can indicate configuration problems that need attention even after the formal integration date has passed.
Common Wave 25 Preparation Mistakes
One common mistake is assuming that existing Phase One compliance automatically means the software is ready for Phase Two. Integration introduces additional technical and invoice requirements, so businesses need a separate readiness assessment.
Another mistake is beginning with the Fatoora API while ignoring the quality of the underlying invoice data. An integration cannot produce a compliant invoice reliably if required information is missing from the ERP or customer records.
Businesses can also underestimate the number of systems involved. A separate POS, branch billing platform or e-commerce application may remain outside the main ERP project unless someone maps the full invoice environment.
Leaving testing until January is another avoidable risk. Vendor schedules, software changes, master-data problems and unexpected invoice scenarios can all create delays. Early testing gives the organisation time to correct the process before compliance becomes a production emergency.
Use the Compliance Project to Improve Finance Automation
Wave 25 is primarily a regulatory requirement, but the implementation can also reveal broader opportunities to improve invoice processing.
A company may discover that customer information is entered several times, invoice approval depends on email, credit notes require manual reconciliation or finance lacks visibility into failed transactions. These are operational problems that existed before the ZATCA project.
Where appropriate, businesses can improve those workflows while building the required integration. Invoice data can move directly from validated ERP transactions, exception alerts can be automated and management can gain clearer visibility into invoice status.
The priority should still be meeting the compliance deadline. The wider benefit is using the project to remove inefficient manual work that would otherwise continue after Fatoorah compliance has been achieved.
A Final Wave 25 Readiness Check
Before 1 February 2027, the organisation should be confident that it has confirmed its Wave 25 status, identified every relevant invoice source, implemented a compliant Phase Two solution and completed the required integration with Fatoora. Required invoice fields should be available consistently from source systems, and the organisation should understand how both clearance and reporting workflows apply to its invoice types.
The business should also have tested representative invoices and electronic notes, trained responsible users, established an exception-management process and defined ownership for production support. Connectivity, credentials, permissions and monitoring should be reviewed before the final production cutover.
If several of these elements remain unclear, the company should treat them as current project risks rather than waiting for the deadline to expose them.
Conclusion
ZATCA E-Invoicing Wave 25 brings taxpayers whose VAT-subject revenues exceeded SAR 187,500 during 2022, 2023, 2024 or 2025 into the next stage of Saudi Arabia’s electronic invoicing rollout when they are targeted and notified by ZATCA. Their e-invoicing solutions need to be integrated with the Fatoora Platform by 1 February 2027.
Preparation needs to go beyond purchasing software. Businesses should review invoice-generating systems, master data, ERP integration, structured invoice requirements, onboarding, clearance and reporting workflows, testing and exception management. Starting early also creates enough time to solve problems properly instead of relying on manual workarounds as the deadline approaches.
For organisations modernising their finance and technology environment, Digital Transformation KSA covers wider automation, systems integration and digital transformation considerations relevant to businesses operating in the Kingdom. For Wave 25 taxpayers, however, the immediate priority is straightforward: complete the technical and operational preparation early enough to enter February 2027 with a tested and sustainable Fatoora integration.
FAQs
What is the deadline for ZATCA E-Invoicing Wave 25?
Taxpayers targeted in Wave 25 need to integrate their e-invoicing solutions with ZATCA’s Fatoora Platform by no later than 1 February 2027.
Who falls under ZATCA E-Invoicing Wave 25?
Wave 25 covers targeted taxpayers whose revenues subject to VAT exceeded SAR 187,500 during 2022, 2023, 2024 or 2025. ZATCA notifies taxpayers selected for the wave.
Is Phase One e-invoicing compliance enough for Wave 25?
No. Phase Two introduces additional requirements, including integration with Fatoora, additional invoice fields and specified electronic invoice formats. Businesses should assess whether their existing solution supports the Integration Phase.
Does Wave 25 require a new ERP system?
Not necessarily. An existing ERP or accounting solution may be upgraded or integrated with an appropriate compliant e-invoicing solution. The correct approach depends on the capabilities of the existing system and the organisation’s invoice architecture.
What should businesses test before the February 2027 deadline?
Businesses should test the invoice and electronic-note scenarios they actually use, including relevant tax invoices, simplified invoices, credit notes, debit notes, VAT treatments and exception cases. They should also confirm that employees can identify and resolve validation or integration failures through a controlled process.