On 24 July 2026, the Zakat, Tax and Customs Authority (ZATCA) announced the criteria for Wave 25 of Phase 2 of e-invoicing, with an integration deadline of 1 February 2027. The criterion is VAT-subject revenues exceeding SAR 187,500 in any of the years 2022, 2023, 2024 or 2025.
That figure is what makes this wave different from every wave before it. SAR 187,500 is also the voluntary VAT registration threshold — meaning Phase 2 integration is no longer a large-company matter. It now reaches effectively the entire VAT-registered population, including voluntary registrants.
Table of contents
Where e-invoicing stands today
Phase 1: Generation
Effective 4 December 2021. All taxpayers subject to the regulation (excluding non-residents), and parties issuing invoices on behalf of a taxable supplier, must generate and store tax invoices and associated notes through a compliant electronic solution. This phase has applied to everyone since that date.
Phase 2: Integration
Began 1 January 2023 and is rolled out in waves by targeted taxpayer group. It adds further technical and business requirements and obliges the taxpayer to integrate its electronic solution with ZATCA’s FATOORA platform. ZATCA notifies targeted taxpayers at least six months in advance.
Wave 25: criteria and deadline
| Item | Detail |
|---|---|
| Criterion | VAT-subject revenues exceeding SAR 187,500 |
| Measurement years | 2022, 2023, 2024 or 2025 — exceeding the threshold in any one is sufficient |
| Integration deadline | 1 February 2027 |
| Announcement date | 24 July 2026 |
The scale of the expansion is clearest against the previous wave:
| Wave | Revenue threshold | Measurement years | Deadline |
|---|---|---|---|
| Wave 24 | Exceeding SAR 375,000 | 2022, 2023 or 2024 | 30 June 2026 (closed) |
| Wave 25 | Exceeding SAR 187,500 | 2022, 2023, 2024 or 2025 | 1 February 2027 |
The threshold halved and 2025 was added to the measurement years. The result is that a large segment of small and micro enterprises falls within scope of integration for the first time.
How to tell whether your business is targeted
- Review VAT-subject revenues for each year from 2022 to 2025 separately. The test is not the average and not the latest year — it is whether the threshold was exceeded in any of them. A business that exceeded SAR 187,500 in 2023 and declined afterwards remains in scope.
- Check for notification from ZATCA. The Authority notifies targeted taxpayers at least six months before the deadline. A notification that did not arrive — or arrived at a contact address no longer monitored — is not itself an exemption, so contact details held with ZATCA should be reviewed.
- Distinguish VAT-subject revenues from accounting turnover. The test is based on taxable supplies, not the revenue line in the income statement. The difference can be material where a business has exempt or out-of-scope supplies.
What integration actually requires
- An electronic solution compliant with Phase 2 requirements, capable of integrating with the FATOORA platform.
- Invoices issued in the required format, with the mandatory fields and the QR code to Phase 2 specifications.
- The correct integration mechanism per invoice type. Tax invoices (business to business) follow a different mechanism from simplified invoices (to the final consumer) as regards when the invoice is transmitted to the Authority.
- Clean master data: VAT number, commercial registration, national address, and business customers’ details. Errors in these fields surface as validation failures at integration.
- Real testing before the deadline, not in its final week.
Why deferring to January 2027 is a mistake
- Selecting, approving and migrating to a solution takes weeks in businesses running on legacy systems or spreadsheets.
- Cleaning customer data and VAT numbers typically reveals gaps that require contacting the customers themselves.
- Solution providers face a demand peak in the months before each wave, which slows both implementation and support as the deadline approaches.
- An integration defect discovered after the deadline directly affects the ability to issue invoices your business customers can accept — a commercial consequence before a regulatory one.
Related penalties
ZATCA publishes a schedule of tax violation fines, of which the following relate directly to invoicing:
| Violation | Fine |
|---|---|
| Failure to keep invoices, books and records | Up to SAR 50,000 |
| Any other breach of the VAT Law or its regulations | Up to SAR 50,000 |
| Repeat violation within three years | The fine may be doubled |
Breaches of the e-invoicing provisions specifically have their own schedule adopted by ZATCA, whose published rules provide that general violations begin with a warning to the violator before a fine is imposed, escalating on repetition. We do not state specific amounts here; the reference is ZATCA e-invoicing violations guideline in the version in force at the time of reading.
A suggested plan to 1 February 2027
| Period | Action |
|---|---|
| September – October 2026 | Determine whether the business is targeted; review 2022–2025 revenues; update contact details held with ZATCA |
| October – November 2026 | Select and contract the electronic solution; clean customer data, VAT numbers and national addresses |
| November 2026 – January 2027 | Configuration and test integration with FATOORA; resolve validation failures |
| January 2027 | Parallel running and confirmation that invoices are accepted before the deadline |
Frequently asked questions
What is the Wave 25 e-invoicing threshold?
VAT-subject revenues exceeding SAR 187,500 in any of the years 2022, 2023, 2024 or 2025. Exceeding the threshold in a single one of those years is sufficient for the business to be in scope.
What is the Wave 25 integration deadline?
1 February 2027, per ZATCA announcement of 24 July 2026.
I have not received a notification from ZATCA — am I out of scope?
ZATCA notifies targeted taxpayers at least six months before the deadline, but a missing notification may simply reflect outdated or unmonitored contact details. The safer course is to review the business revenues for the measurement years directly and to update the contact details held with the Authority.
What is the difference between Phase 1 and Phase 2?
Phase 1 (from 4 December 2021) concerns generating and storing tax invoices and notes through a compliant electronic solution. Phase 2 (from 1 January 2023, in waves) adds technical and business requirements and obliges integration of the electronic solution with ZATCA FATOORA platform.
My revenues exceeded the threshold only in 2023 and then fell — am I in scope?
Yes. The announced criterion is exceeding the threshold in any of the measurement years, not in the latest year or on average.
Does the integration mechanism differ between tax invoices and simplified invoices?
Yes. Tax invoices issued to businesses and simplified invoices issued to the final consumer follow different mechanisms as regards when the invoice is transmitted to the Authority. Confirming that the electronic solution supports both correctly is among the most important checks before integration.
How we can help
Our role at Almousa & Altamimi, Certified Public Accountants and Auditors is not to sell invoicing software. It is to confirm that what your business issues is compliant and consistent with its books and returns: determining whether you are targeted by the wave, reviewing the completeness of tax invoice fields, and reconciling invoicing system output with VAT returns before differences become an assessment.
See our zakat and tax services, or contact us to review your Phase 2 readiness. If you also have outstanding fines or unfiled returns, see our guide to the fines cancellation initiative running to 31 December 2026.
Quick reference: Glossary · FAQ
Official sources: ZATCA — e-invoicing roll-out phases; Wave 25 criteria announcement (24 July 2026); Wave 24 criteria announcement (26 September 2025); tax violations and fines page. This content is general guidance and is not a substitute for professional advice on a specific case. Last updated: 14 September 2026.
Fuller guide: E-Invoicing in Saudi Arabia: From Generation to Integration — Who Is Covered, When, and What Changes in Your Books.
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