Mandatory Electronic Invoicing in Saudi Arabia: FATOORAH Project

Electronic invoicing in Saudi Arabia: Connecting to ZATCA

The electronic invoicing project in Saudi Arabia is called the FATOORAH and is applicable to B2B, B2C, and B2G transactions. In December 2021, Saudi Arabia made electronic invoices mandatory for all in-country taxpayers. The implementation of the electronic invoicing system began on December 4^th and the Zakat, Tax and Customs Authority (ZATCA) declared it will implement it in two phases.

The ZATCA has defined its electronic invoicing system as well as the technical requirements for electronic invoices. The new norm will apply to B2B transactions and will affect all resident taxpayers in the country. It will also affect third parties who issue invoices in the name of a taxpayer subject to VAT. Companies that do not reside in Saudi Arabia are exempted.

Do you need to comply with Saudi Arabia's FATOORAH requirements? We can help you. Watch our webinar and learn how the system works. Also in Arabic version.

Phases of the FATOORAH e-Invoicing project

Phase 1: December 4th, 2021

Taxpayers will have to issue electronic invoices with a compatible system that allows the required fields to be represented in the electronic invoice. The system must also archive and generate an electronic copy for the client. Manual invoices will no longer be accepted

The mandatory fields that must be included in the electronic invoice in phase 1 are the VAT number of the buyer if registered as a taxpayer mandated to invoice; the issuance date of the invoice and the VAT. Optionally issuers can add a QR code to B2B invoices but must include it on the simplified B2C invoices.

Phase 2: Integration phase with ZATCA

This phase will be carried out gradually. ZATCA will inform at least six months in advance of the integration date. Keep up with the compliance calendar:

1. As of January 1, 2023, the first wave companies that are obliged to connect to ZATCA are those based on the revenue subject to VAT for the year 2021 exceeding (3 billion) SAR.
2. As of July 1, 2023, taxpayers that are obliged to connect to ZATCA are those with revenues subject to VAT surpassing SAR 0,5 billion.
3. As of October 1, 2023, taxpayers obliged to integrate their e-Invoicing systems with the FATOORAH platform are those with VATable income exceeding 250 million Saudi Rials.
4. As of November 1, 2023, taxpayers obliged to integrate their e-Invoicing systems with the FATOORAH platform are those with VATable income exceeding 150 million Saudi Rials.
5. As of December 1, 2023, taxpayers obliged to integrate their e-Invoicing systems with the FATOORAH platform are those with VATable income exceeding 100 million Saudi Rials.
6. As of January 1st, 2024, taxpayers obliged to integrate their e-Invoicing systems with the FATOORAH platform are those with VATable income exceeding 70 million Saudi Rials.
7. As of February 1st, 2024, taxpayers obliged to integrate their e-Invoicing systems with the FATOORAH platform are those with VATable income exceeding 50 million Saudi Rials.
8. As of March 1st, 2024, taxpayers obliged to integrate their e-Invoicing systems with the FATOORAH platform are those with VATable income exceeding 40 million Saudi Rials.
9. As of June 1st, 2024, taxpayers obliged to integrate their e-Invoicing systems with the FATOORAH platform are those with VATable income exceeding 30 million Saudi Rials.
10. As of October 1st, 2024, taxpayers obliged to integrate their e-Invoicing systems with the FATOORAH platform are those with VATable income exceeding 25 million Saudi Rials.
11. As of November 1st, 2024, taxpayers obliged to integrate their e-Invoicing systems with the FATOORAH platform are those with VATable income exceeding 15 million Saudi Rials in 2022 or 2023.
12. As of December 1st, 2024, taxpayers obliged to integrate their e-Invoicing systems with the FATOORAH platform are those with VATable income exceeding 10 million Saudi Rials in 2022 or 2023.
13. As of January 1st, 2025, taxpayers obliged to integrate their e-Invoicing systems with the FATOORAH platform are those with VATable income exceeding 7 million Saudi Rials in 2022 or 2023.

During this phase, the following requirements must be followed: all electronic invoices including tax invoices or simplified tax invoices, and their associated documents must be generated in an XML or PDF/ A-3 (with XML) format.

The electronic invoicing solution must be able to connect to the internet and integrate with external systems through the ZATCA’s API.

The following security mechanisms must be implemented to guarantee the integrity of the invoices: digital signature, unique universal identifier (UUID), the generation of a hash, and a QR code.

EDICOM Global e-Invoicing Solution

EDICOM is a technology provider specializing in Electronic Data Interchange and e-invoicing solutions. Currently, EDICOM operates in over 75 countries and offers electronic invoicing solutions for electronic invoicing systems around the world. EDICOM’s technical and regulatory experience enables it to rapidly and effectively implement new solutions in new countries.

EDICOM’s International Electronic Invoicing Platform for the issuance and reception of electronic invoices is adaptable to the specifications of each country where you and your partners operate and is constantly updated to ensure compliance.