ZATCA e-invoicing (FATOORA): who must comply and when

Since 4 December 2021, every resident taxpayer has to issue and keep its tax invoices through a compliant electronic solution. ZATCA is explicit about what does not count:

• Handwritten invoices
• Invoices typed in a text editor
• Paper invoices that were scanned or copied into an electronic file

Simplified (business-to-consumer) invoices must carry a QR code generated by the e-invoicing solution.

In the second phase, the taxpayer's e-invoicing solution is connected to ZATCA's FATOORA platform and issues invoices in a set format.

• Clearance — standard tax invoices (business to business): ZATCA checks each invoice and stamps it before it goes to the buyer.
• Reporting — simplified invoices (business to consumer): each invoice is reported to ZATCA within 24 hours of being issued.

Phase 2 has rolled out since 1 January 2023 in waves, each defined by VAT-subject revenue in set reference years. Under ZATCA's implementation resolution, each group is notified at least six months before its date. Some of the waves ZATCA has announced:

• Wave 1: revenue above SAR 3 billion in 2021, from 1 January 2023
• Wave 20: above SAR 1.5 million in 2022 or 2023, by 31 October 2025
• Wave 22: above SAR 1 million in 2022, 2023 or 2024, by 31 December 2025
• Wave 24: above SAR 375,000 in 2022, 2023 or 2024, by 30 June 2026
• Wave 25: above SAR 187,500 in 2022, 2023, 2024 or 2025, by 1 February 2027

The date that applies to your company is the one in ZATCA's notice to you.

When Phase 1 began, ZATCA published how it treats violations:

• Not issuing e-invoices: starts with a fine of SAR 5,000
• Deleting or amending invoices: starts with a fine of SAR 10,000
• A missing QR code, a missing buyer VAT number, or not reporting a malfunction of the solution: starts with a warning

• If the company is registered for VAT, Phase 1 applies from its first invoice, so choose an e-invoicing solution before the first sale.
• Check that it can integrate with FATOORA, so a later wave notice is a switch, not a migration.
• Keep invoices and records for at least six years, as the VAT rules require.

Mohla does not sell e-invoicing software or issue your invoices. Mohla Comply keeps your ZATCA dates on your 12-month calendar with reminders before each one, and Mohla's team checks ZATCA, with six other platforms, for fines every 15 days.

Mohla's own fee is in the written quote you receive before any work starts.