ZATCA Wave 25: Who's In and Your 1 February 2027 Deadline

ZATCA Wave 25 is the next group of Saudi businesses that must connect their e-invoicing system to ZATCA's Fatoora platform. It covers every taxpayer whose revenue subject to VAT went above SAR 187,500 in any one of 2022, 2023, 2024 or 2025, and the deadline is 1 February 2027. That threshold is half of the previous wave's, so many small businesses that have only dealt with Phase 1 so far are now in scope.

The short version

• Who: taxpayers whose revenue subject to VAT exceeded SAR 187,500 in 2022, 2023, 2024 or 2025. One year over the line is enough.
• When: integrate with Fatoora by 1 February 2027, according to ZATCA's announcement of 24 July 2026.
• What changes: your invoices are issued in ZATCA's XML format, stamped, and shared with ZATCA. Standard (B2B) tax invoices are cleared before your customer receives them; simplified (B2C) invoices are reported within 24 hours.
• How you'll know: ZATCA notifies the taxpayers in each wave. Don't wait for the letter to start preparing.

What Is ZATCA Wave 25?

Saudi e-invoicing has two phases. Phase 1, the Generation Phase, started on 4 December 2021. It ended handwritten invoices and invoices typed in Word or Excel, and required businesses to issue and store e-invoices with the required fields, including the QR code.

Phase 2, the Integration Phase, started on 1 January 2023. On top of Phase 1, it requires your e-invoicing solution to connect to ZATCA's Fatoora platform, issue invoices in a specific format, and include additional fields. ZATCA rolls it out in waves, starting with the largest taxpayers and lowering the revenue threshold each time.

Wave 1 covered businesses with more than SAR 3 billion in 2021 revenue, as EY's wave-by-wave summary shows. Wave 24 reached SAR 375,000, with a deadline of 30 June 2026. Wave 25 cuts that threshold in half to SAR 187,500 and, for the first time, counts 2025 revenue.

The Wave 24 announcement date is from Thomson Reuters' regulatory updates; every other figure in the table comes from ZATCA's own announcements.

Am I in Wave 25?

Answer three questions, using your VAT returns or financial statements.

1. Are you a taxpayer resident in Saudi Arabia and subject to the E-Invoicing Regulation? Wave 25 is aimed at resident VAT taxpayers.
2. What was your revenue subject to VAT in each of 2022, 2023, 2024 and 2025? Use revenue subject to VAT, not every riyal that came into the business.
3. Did any single year exceed SAR 187,500? If yes, you're in Wave 25, unless an earlier wave already covered you.

Two details trip people up. First, it's any one year, not an average: one strong year is enough, even if revenue fell afterwards. Second, the rule says "exceeded", so a year of exactly SAR 187,500 doesn't put you in on its own.

Worked examples (hypothetical)

These four businesses are made up to show how the rule works. Check your own figures, and any notification from ZATCA, before you rely on them.

If you look like the Khobar retailer and haven't integrated yet, treat it as urgent: speak to your software provider and check your ZATCA notifications now.

Not in Wave 25? Phase 1 rules still apply to you. ZATCA says it will notify later waves at least six months before their integration date.

What Does Phase 2 Integration Actually Require?

Phase 1 asked you to generate e-invoices. Phase 2 asks your system to talk to ZATCA. In practice, that means:

• A compliant e-invoicing solution. Your software (ZATCA calls each unit an EGS, an e-invoice generation solution) must create invoices as XML following the UBL 2.1 standard in ZATCA's XML Implementation Standard. Invoices can be shared as XML or as a PDF/A-3 file with the XML embedded.
• Onboarding on the Fatoora portal. You log in, generate a one-time password for each EGS unit (valid for one hour, according to the Fatoora portal user manual) and enter it in your software. The software then gets its Cryptographic Stamp Identifier (CSID) from ZATCA through APIs.
• A cryptographic stamp on every invoice. The CSID is a certificate your software uses to stamp each invoice, so ZATCA can confirm who issued it and that nobody changed it afterwards.
• Clearance for standard tax invoices (B2B). ZATCA checks each invoice and adds its stamp before you share it with your customer.
• Reporting for simplified tax invoices (B2C). Retail receipts go to your customer straight away and must be reported to ZATCA within 24 hours, under ZATCA's E-Invoicing Implementation Resolution.
• Credit and debit notes too. Electronic notes follow the same route as the invoices they relate to.
• Phase 1 still applies. Required fields such as the QR code don't go away.

Do you need "ZATCA-approved" software? Not strictly. ZATCA's Solution Providers Directory lists providers that passed its qualification process, but ZATCA calls the list indicative and says any solution that meets the requirements is compliant. Either way, the responsibility stays with you, the taxpayer.

Key Dates at a Glance

What If You Miss the Deadline?

ZATCA publishes a classification of e-invoicing violations (in Arabic, May 2024 edition). For each violation, the first occurrence gets a warning and the fine rises with every repeat. Two matter most for Wave 25:

• Not connecting your e-invoicing systems to ZATCA from your integration date: a warning, then SAR 10,000, 15,000, 20,000, 30,000 and 40,000 for the second to sixth occurrences, and SAR 50,000 for each one after that.
• Not sharing e-invoices with ZATCA in the required format and time: a warning, then SAR 5,000 for the second occurrence, rising to SAR 40,000 after the sixth.

The guide gives 30 days after a warning to correct either one. The bigger risk is operational, though: standard tax invoices have to be cleared by ZATCA before they reach your customer, so a system that isn't connected holds up your billing.

Your Wave 25 Readiness Checklist

1. Confirm you're in. Pull your revenue subject to VAT for 2022 to 2025 from your VAT returns and note which year, if any, went above SAR 187,500.
2. Watch for ZATCA's notification. Make sure the contact details on your ZATCA account reach someone who will act on them.
3. List every place invoices are made. Office software, POS tills, van salesmen's phones, branch systems. Each EGS unit needs onboarding.
4. Ask your software provider direct questions. Does it support Phase 2 clearance and reporting? Is Phase 2 in your current plan or an add-on? Who handles onboarding?
5. Clean your customer list. B2B invoices need each customer's correct VAT number and address. Fix duplicates and missing VAT numbers now.
6. Clean your item list. Clear item names, units and the right VAT treatment on every product and service.
7. Sort out Fatoora portal access. Know who in your business can log in and generate the one-time passwords for onboarding.
8. Onboard and test early. Run a tax invoice, a credit note and a POS receipt through the full flow well before go-live, not in the last week of January.
9. Train the people who invoice. Cashiers, salesmen and accountants should know what to do when an invoice is rejected.
10. Plan for outages. Agree who reports a technical problem to ZATCA and how. Failing to report incidents that stop you issuing e-invoices is itself a violation in ZATCA's guide.

How RaadERP Helps

RaadERP is a cloud ERP for trading, van sales, retail and manufacturing businesses in the GCC. For Saudi Arabia it covers ZATCA Phase 1 and 2: a QR code on every invoice and receipt, and Phase 2 invoices sent to ZATCA automatically in the background. Invoices are made in Arabic and English, in the office, the shop or the van, and stock and accounts update with every sale.

Moving from Excel or older software? Our team imports your products, customers and opening balances and trains your staff, which is also the right moment to clean the data Phase 2 depends on. See RaadERP, or Raad POS for supermarkets and grocery stores. You can try RaadERP free for 14 days, with no credit card required.

Not Sure If You're in Wave 25? WhatsApp Us

Send us your revenue subject to VAT for 2022 to 2025 and we'll tell you whether Wave 25 is likely to apply to you, and the one thing to fix first.

WhatsApp "ZATCA" to +971 56 102 1565 and we'll reply quickly.

Selling in the UAE too? It's a different system. Read UAE E-Invoicing 2027 Made Simple.

This article is general information only and is not legal, tax or professional advice. Regulations, including ZATCA, UAE Ministry of Finance and FTA requirements, change often, and this content may be incomplete, out of date or contain errors. Before you act on it, check with the official authority (ZATCA in Saudi Arabia, or the Ministry of Finance or Federal Tax Authority in the UAE) or a qualified tax adviser. Raad ERP makes no warranties about the accuracy or completeness of this content and accepts no liability for any loss arising from reliance on it. Links to third-party websites are provided for convenience and are not endorsements.