ZATCAe-invoicingSaudi ArabiaFatooraVAT complianceAxion ERP

ZATCA wave 25 e-invoicing explained

12 October 20267 min readAxion ERP Team — GCC Finance & Compliance

ZATCA wave 25 e-invoicing requires Saudi businesses with VAT-subject revenue above SAR 187,500 in 2022-2025 to integrate with Fatoora by 1 February 2027.

ZATCA wave 25 e-invoicing brings Saudi Arabia's Fatoora integration requirement down to businesses with VAT-subject revenue above SAR 187,500 in 2022, 2023, 2024 or 2025. If your revenue crossed that threshold in any one of those four years, your e-invoicing solution must be integrated with the Fatoora platform by 1 February 2027. This is the twenty-fifth wave of the Zakat, Tax and Customs Authority's phased roll-out of Phase Two, and it reaches far further down the SME market than any wave before it.

If you already know the mechanics of Fatoora phase 2, the sections below tell you whether you are in scope and when to act. For the full technical walkthrough of clearance, reporting, XML and QR codes, see our KSA ZATCA phase 2 guide, which this post updates rather than repeats.

Who is in ZATCA wave 25 e-invoicing

ZATCA confirmed that wave 25 of the Integration Phase "included all taxpayers whose revenues subject to VAT exceeded (SAR 187,500) during 2022, 2023, 2024 or 2025", according to the authority's own announcement on zatca.gov.sa. The test looks at your VAT-subject revenue in any single one of those four years, not your current turnover and not a cumulative total. A business that had a strong year in 2022 and a quieter one since is still in scope if that one year cleared the line.

ZATCA says it will notify targeted taxpayers directly to integrate by no later than 1 February 2027, and the authority's roll-out policy is to give each wave at least six months' notice before its integration date, as set out on the roll-out phases page. If you have not received a direct notice but your revenue meets the threshold in any qualifying year, do not wait for a letter. Confirm your status with ZATCA or your tax adviser well ahead of the deadline.

What counts as VAT-subject revenue

ZATCA's notice does not define every edge case of what counts toward the SAR 187,500 figure, such as exempt supplies, zero-rated exports or intra-group transactions. Where your own bookkeeping leaves this unclear, the safest approach is to check directly with ZATCA or a Saudi tax adviser rather than guess, since the integration obligation and any related fines turn on this figure.

How wave 25 compares to wave 24

Wave 25 is a sharp drop from the previous wave. Wave 24 covered taxpayers whose VAT-subject revenue exceeded SAR 375,000 in 2022, 2023 or 2024, with integration due by 30 June 2026, as confirmed on zatca.gov.sa. Wave 25 halves that threshold to SAR 187,500 and adds 2025 as a qualifying year, which is why so many smaller Saudi businesses are now reading about Fatoora integration for the first time.

The pattern across both waves is consistent: a falling revenue threshold, an expanding set of qualifying years, and a fixed integration deadline rather than a rolling one. Expect ZATCA to continue lowering the bar in future waves, which is relevant if your business currently sits just under the SAR 187,500 line.

What integration into Fatoora actually requires

Phase One, the Generation Phase, has applied to resident taxpayers since 4 December 2021 and simply requires you to generate and store compliant electronic tax invoices and notes, as described on ZATCA's roll-out phases page. Phase Two, the Integration Phase, is a different undertaking. ZATCA's own wave 25 notice describes it as integrating your e-invoicing solution with the Fatoora platform, issuing invoices in a specific format, and including additional fields on the invoice, on top of everything Phase One already required.

In practice, this means your system has to be onboarded as an e-invoicing generation solution (an EGS unit), produce invoices in the structured format Fatoora expects, and either send standard business-to-business invoices for real-time clearance or report simplified business-to-consumer invoices within the window ZATCA sets. Industry trackers describe this as signed UBL 2.1 XML documents carrying a UUID, a counter and a cryptographic hash chain, with a QR code on the printed or displayed invoice, though this level of technical detail sits outside ZATCA's own published pages and should be treated as secondary-sourced, as in this phase 2 wave summary. The authoritative description of what you must do remains ZATCA's own notices and your EGS onboarding instructions.

Preparation timeline counting back from 1 February 2027

Work backwards from the deadline rather than forwards from today. A workable sequence looks like this:

Confirm whether your VAT-subject revenue in 2022, 2023, 2024 or 2025 exceeded SAR 187,500, and get that confirmed with your accountant or ZATCA directly.
Choose or confirm an e-invoicing solution that can handle onboarding of an EGS unit: generating a cryptographic CSR, completing the Fatoora OTP step, and obtaining a compliance CSID before moving to a production CSID.
Run a full test cycle against ZATCA's integration environment before you touch live invoices. A non-ZATCA tracker covering wave 24's timeline describes an onboarding and testing window running from roughly 1 April to 30 June 2026. Build a similar buffer into your own plan rather than leaving onboarding to the final weeks.
Go live on production CSID well before 1 February 2027, so that any rejected clearance requests or formatting errors surface while you still have time to fix them.
Keep your Phase One generation and storage habits running throughout. Integration adds obligations; it does not replace the underlying requirement to generate and retain compliant invoices.

Penalties for missing the deadline

ZATCA's own violations and fines page states that the violation of not issuing electronic invoices begins with a fine of SAR 5,000, and that deleting or amending electronic invoices after issuance begins with a fine of SAR 10,000, with all fines applied according to the type of violation and the number of repetitions, as published on zatca.gov.sa. These are the starting figures for two specific violation types, not a complete schedule, and repeated breaches are described as escalating. Do not rely on any figure beyond these two unless it comes from a ZATCA page, and check directly with ZATCA for the current fine schedule before budgeting for non-compliance as a cost of doing business.

ZATCA phase 2 onboarding, including EGS unit registration (CSR, Fatoora OTP, compliance and production CSID) and the chaining and signing of invoices for clearance or reporting, is one of the areas covered by the Finance box in Axion ERP, alongside per-line VAT at GCC rates and the four financial statements each legal entity needs for its own records. Questions specific to how your entity qualifies for a wave, or how your onboarding should be sequenced, belong with ZATCA or your tax adviser, and our FAQ page covers the general compliance questions we are asked most often.

Frequently asked questions

Who exactly is in ZATCA wave 25 e-invoicing?

Businesses whose VAT-subject revenue exceeded SAR 187,500 in 2022, 2023, 2024 or 2025 are in wave 25, according to ZATCA's own announcement. The test applies if any one of those four years crossed the threshold, not an average or a current-year figure.

What is the fatoora integration deadline for wave 25?

ZATCA set 1 February 2027 as the deadline for wave 25 taxpayers to have their e-invoicing solution integrated with the Fatoora platform. ZATCA also notifies each wave directly at least six months before its integration date.

How is wave 25 different from wave 24?

Wave 24 covered businesses above SAR 375,000 in VAT-subject revenue during 2022 to 2024, with a 30 June 2026 deadline. Wave 25 halves that threshold to SAR 187,500 and adds 2025 as a qualifying year, bringing many smaller businesses into scope.

What happens if my business misses the integration deadline?

ZATCA's published fines page states that failing to issue electronic invoices begins with a fine of SAR 5,000, and that deleting or amending invoices after issuance begins with a fine of SAR 10,000, with fines escalating on repetition. Confirm the current fine schedule directly with ZATCA, since this covers only two specific violation types.

Does being in Phase One mean I am automatically ready for wave 25?

No. Phase One only requires you to generate and store compliant invoices, while Phase Two integration requires connecting your solution to the Fatoora platform, issuing invoices in the required format and sending them for clearance or reporting. These are separate obligations and Phase One compliance does not cover the integration step.

Sources

Axion ERP brings finance, people, sales, commerce and supply chain into one system built for GCC compliance: VAT per country, ZATCA and UAE e-invoicing, WPS files, GOSI, gratuity, Arabic and English, unlimited users, priced per box. See the features and pricing pages, or contact us about a pilot.

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