Saudi e-invoicing, handled for you
Since December 2021 every invoice in the Kingdom must be electronic. In Phase 2, each one is produced as XML, signed with your cryptographic stamp and cleared or reported to ZATCA. Here is what that means, when it applies to you, and how Nizam does it.
What is e-invoicing in Saudi Arabia?
E-invoicing (FATOORA) is the Zakat, Tax and Customs Authority's (ZATCA) system for issuing, keeping and amending tax invoices and notes electronically. Since 4 December 2021 (Phase 1, Generation) every resident VAT-registered business must issue its invoices from a compliant electronic solution: handwritten invoices and invoices typed in a word processor are no longer allowed, and simplified invoices must carry a QR code.
Phase 2 (Integration), rolled out in waves from 1 January 2023, connects your invoicing system to ZATCA's platform. Every invoice is produced as structured XML (UBL 2.1), chained to the one before it by a hash, signed with a cryptographic stamp issued by ZATCA, and either cleared by ZATCA before it reaches your customer (standard B2B invoices) or reported to ZATCA within 24 hours (simplified B2C invoices).
- VAT LawThe Kingdom's Value Added Tax Law, in force since 1 January 2018.
- VAT Implementing RegulationsSet out what a tax invoice and a simplified tax invoice must contain.
- E-Invoicing RegulationIssued by the ZATCA Board on 4 December 2020: makes electronic invoicing mandatory and sets the two phases.
- Controls, Requirements, Technical Specifications and Procedural RulesZATCA's rules for the solutions, the invoice content, the QR code, the cryptographic stamp, clearance and reporting.
- XML and Security Features Implementation StandardsThe technical standards: the UBL 2.1 data model, hashing, signing and the QR code.
Objectives & business benefits
Less shadow economy
Every sale leaves a verifiable electronic trail, which closes the gaps where VAT goes unpaid.
A fairer market for compliant businesses, and fewer disputes with ZATCA.
Digital tax reporting
Invoices reach ZATCA as structured data instead of paper and PDFs.
Faster VAT returns and audits, with less manual work and fewer errors.
Consumer protection
Anyone can scan the QR code on a simplified invoice to check it.
More trust between businesses and their customers.
Vision 2030
Part of the Kingdom's move to a digital economy and digital government.
Ready, automated processes that scale as your business grows.
Phase 2 ties every invoice to the one before it and to your cryptographic stamp — an invoice cannot be changed or deleted afterwards; it can only be corrected with a credit or debit note.
How it helps businesses in the Kingdom
Beyond compliance, FATOORA builds a digital ecosystem that benefits the whole private sector.
VAT compliance & fraud prevention
Tamper-proof, traceable invoices keep you compliant and sharply reduce manual errors, fake invoices and penalties.
Note: Builds confidence between your business and ZATCA.
Faster business
Structured invoices move straight into your customer's system, without retyping or lost paper.
Note: Quicker approval and payment.
Better data
The same data that goes to ZATCA gives you clean, real-time figures for your own reports.
Note: Decisions based on numbers you can trust.
Long-term predictability
A transparent business environment gives you more confidence to plan for the long term.
Note: A stable environment for future growth.
Which invoices are in scope?
Every resident VAT-registered business, for both kinds of invoice. Non-resident taxpayers are outside the e-invoicing requirements.
Standard tax invoices (B2B, B2G)
- Sales to other businesses and to government.
- In Phase 2, cleared by ZATCA before you share them with the buyer.
- Shared with the buyer as XML, or as a PDF/A-3 with the XML inside.
- Credit and debit notes follow the same route.
Simplified tax invoices (B2C)
- Sales to consumers — the till receipt.
- Carry a QR code the customer can scan.
- In Phase 2, handed to the customer at once and reported to ZATCA within 24 hours.
- Printed or sent electronically, as the customer prefers.
Phase 1 applies to every resident VAT-registered business. Phase 2 reaches businesses in waves set by their VAT-taxable revenue in a reference year; ZATCA notifies each business at least six months before its integration window opens.
When it applies to you
Phase 1 already applies to everyone. Phase 2 arrives wave by wave, largest businesses first; your notification from ZATCA tells you your window.
| Phase | Who | Notified by ZATCA | Must be integrated |
|---|---|---|---|
| Phase 1 — Generation | Every resident VAT-registered business | — | Since 4 December 2021 |
| Phase 2 — Wave 1 | VAT-taxable revenue above SAR 3 billion (2021) | Mid 2022 | 1 January – 30 June 2023 |
| Phase 2 — Wave 2 | Revenue above SAR 500 million (2021) | Early 2023 | 1 July – 31 December 2023 |
| Phase 2 — Wave 3 | Revenue above SAR 250 million (2021) | Early 2023 | 1 October – 31 December 2023 |
| Phase 2 — later waves | Revenue thresholds stepping down — SAR 150 million, 100 million, 70 million, 50 million and lower | At least 6 months before | The window in your notification |
ZATCA keeps announcing new waves with lower thresholds until every VAT-registered business is integrated. Check your notification and the ZATCA website for your own dates.
Clearance and reporting
In Phase 2 your system talks to ZATCA's FATOORA platform directly — there is no intermediary. What happens next depends on the kind of invoice.
- 1You raise the invoiceYou create the invoice in your system — in Nizam, exactly as you do today.
- 2It is built and chainedThe invoice becomes UBL 2.1 XML with a unique ID, a counter and the hash of your previous invoice.
- 3It is signedYour cryptographic stamp (the CSID issued by ZATCA) signs it, and the QR code is added.
- 4Cleared or reportedA standard invoice is cleared by ZATCA first; a simplified one is reported within 24 hours.
- 5Your customer receives itThe cleared or stamped invoice reaches your customer — the QR code proves it is genuine.
Connecting to ZATCA
In Saudi Arabia you connect to ZATCA yourself, through your invoicing software — no accredited service provider is needed. Each device or unit that issues invoices is onboarded once.
Unlike the UAE model, ZATCA does not use accredited service providers: your compliant invoicing software is onboarded to the FATOORA platform directly and talks to it on your behalf.
What every e-invoice must carry
The mandatory information, grouped as an invoice reads. A simplified invoice needs less buyer detail; a standard invoice needs it all. Nizam asks for these when you create an invoice.
Seller
- Name of the business
- VAT number — 15 digits, starting and ending with 3
- National address: building number, street, district, city, postal code
- Commercial registration (CR) or other ID
Buyer (standard invoice)
- Name of the buyer
- VAT number, if VAT registered
- National address
- Other ID (CR, national ID…) where there is no VAT number
Invoice metadata
- Sequential invoice number
- Issue date and time
- Unique identifier (UUID)
- Type: tax invoice, credit note or debit note
- Kind: standard or simplified
Line details
- Description of the goods or services
- Quantity and unit price
- VAT rate and VAT amount
- Line total including VAT
- Discounts, if any
Totals
- Total excluding VAT
- Total VAT
- Total including VAT
- Currency (with VAT in SAR)
Phase 2 security
- Invoice counter (ICV)
- Previous invoice hash (PIH)
- Cryptographic stamp
- QR code with the seller, VAT number, time, totals, hash and signature
Language and notes
- Arabic is required (other languages may appear beside it)
- A credit or debit note references the original invoice
- and states the reason for the change
The key fields, by ID
| Category | Field (ID) | Details |
|---|---|---|
| Invoice header | Invoice number (BT-1) | Unique and sequential. |
| Invoice header | Issue date (BT-2) and time | Both are required in Phase 2. |
| Invoice header | Type code (BT-3) | Tax invoice (388), credit note (381), debit note (383). |
| Invoice header | UUID | A unique identifier for every invoice. |
| Chaining | ICV and PIH | The invoice counter, and the hash of the previous invoice. |
| Seller | Seller VAT number (BT-31) | 15 digits, starting and ending with 3. |
| Buyer | Buyer VAT number (BT-48) | Required on a standard invoice when the buyer is VAT registered. |
| Totals | Total excluding VAT (BT-109) | The taxable amount. |
| Totals | Total VAT (BT-110) | In SAR. |
| Totals | Total including VAT (BT-112) | The amount payable. |
Non-compliance: not issuing compliant e-invoices, or not integrating by your deadline, can lead to warnings and fines under ZATCA's penalty schedule.
Technical specifications
Invoice format
- UBL 2.1 XML — the invoice itself
- PDF/A-3 with the XML embedded — to share with the buyer
- QR code in TLV, Base64-encoded
ZATCA APIs
- Compliance CSID — onboarding
- Compliance checks — sample invoices
- Production CSID — going live
- Clearance — standard invoices
- Reporting — simplified invoices
Cryptography
- SHA-256 invoice hash
- ECDSA signature (secp256k1)
- X.509 certificate (CSID) issued by ZATCA
What a complete ZATCA setup covers
These are the pieces a Phase 2-ready invoicing system brings together.
Device onboarding
Signing request, OTP, compliance checks and the production certificate, for each unit that issues invoices.
Clearance & reporting
Standard invoices cleared before they go out; simplified invoices reported within 24 hours.
Hash chain & stamp
Every invoice chained to the previous one and signed, so nothing can be altered afterwards.
QR codes
The QR code on every simplified invoice, with the Phase 2 hash, signature and key inside.
Digital tax reporting
The data captured on each invoice feeds your VAT return without retyping.
Bilingual documents
Arabic as required, with English beside it for your customers and partners.
How to choose your e-invoicing software
- 1Phase 2 readyIt must onboard to ZATCA and clear and report invoices itself.
- 2Both invoice kindsStandard (B2B) and simplified (B2C) invoices, with credit and debit notes.
- 3Arabic built inArabic invoices, ideally bilingual, without extra work.
- 4Every unit coveredEach branch, till and device onboarded and stamping its own invoices.
- 5Clear errorsWhen ZATCA rejects an invoice, you need to see why and fix it fast.
- 6Local supportSupport in Arabic and English, in your time zone.
- 7Time to go liveOnboarding should take minutes, not a project.
In Saudi Arabia the invoicing software is what connects to ZATCA — there is no separate provider. Nizam is onboarded to FATOORA and clears and reports your invoices for you.
ZATCA, from the QR to clearance
Every document you send carries the Phase 1 QR. When Phase 2 reaches you, Nizam onboards with the authority, holds your certificate, and submits each invoice the way the rules ask: tax invoices cleared before they leave, simplified ones reported after. Nothing to install, and nothing to reconcile at the end of the month.
Ready for ZATCA phase 2
How Nizam does it for you
ZATCA e-invoicing, Phase 1 and Phase 2, is built into Nizam — in the Invoice app, at the POS till and in the Hotel app.
Phase 1 QR on every invoice
The ZATCA QR code is printed on your invoices and receipts automatically.
Onboard in minutes
Paste the OTP from the FATOORA portal; Nizam requests the certificates and passes the compliance checks.
Cleared and reported
Standard invoices are cleared and simplified ones reported to ZATCA, with no extra step.
UBL 2.1 XML, signed
Every invoice produced as XML, hashed, chained and stamped with your certificate.
Arabic and English
Bilingual invoices with both names and both addresses, as ZATCA expects.
UAE too
Trading in the UAE as well? Nizam prepares your invoices for the FTA mandate.
Your readiness checklist
- Confirm your VAT number and national address
- Check whether ZATCA has notified you of your wave
- List every branch and till that issues invoices
- Check your invoices carry every mandatory field
- Choose Phase 2-ready software
- Get access to the FATOORA portal
- Name the people who will own it
- Agree how you will test
- Take an OTP for each unit
- Request the compliance certificate
- Pass the compliance checks
- Receive the production certificate
- Watch for rejected or warned invoices
- Train your finance and sales teams
- Tell your customers about QR codes
- Keep your archive as the law requires
KSA e-invoicing, answered
This guide is based on the following primary sources. It is general information, not tax advice.
- Value Added Tax Law and its Implementing Regulations
- E-Invoicing Regulation (ZATCA Board, 4 December 2020)
- Controls, Requirements, Technical Specifications and Procedural Rules for E-Invoicing
- E-Invoicing XML Implementation Standard and Security Features Implementation Standard
- ZATCA announcements of the Phase 2 integration waves
- ZATCA FATOORA portal and developer documentation
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