Saudi Arabia

Running your books in Saudi Arabia

There is a regulator, a rate and an electronic filing obligation to satisfy here. All three are handled inside the software you use every day, rather than by a second product bolted on beside it.

Currency SAR

Standard rate VAT 15%

Electronic invoicing Being rolled out in phases

Authority Zakat, Tax and Customs Authority (ZATCA)

Rates and obligations on this page were last reviewed on 11 September 2026. They are given for orientation, not as tax advice — check the current position with the authority or your accountant before you rely on it.

What that means for a business in Saudi Arabia

15% VAT, SAR and a Saudi chart of accounts are configured for you at sign-up, so your first invoice is already correct.

Arabic is a first-class language here, not a translation layer: the whole interface, your invoices and every report read right-to-left properly.

Phase 2 is built in, not bolted on: standard invoices are cleared with ZATCA before they reach your customer, and simplified invoices are reported automatically, well inside the 24-hour deadline.

You connect once, with a one-time password from the Fatoora portal.

The certificate, the cryptographic stamp, the invoice counter, the hash chain and the QR code are all handled for you.

Rehearse the whole journey against ZATCA's own test environment first — connect, clear, report, correct — and switch to production when you are ready.

Your VAT return is produced from posted journals, so it always ties back to the documents behind it — and Zakat, income tax and withholding sit in accounts of their own, because they are separate obligations.

verified E-invoicing ready

One vendor, one login, one bill

The usual arrangement is accounting software from one company and an e-invoicing service from another, joined by an integration that someone has to keep working. That is two contracts, two support queues and a seam where invoices go missing. Here the invoice, the tax and the accounting entry are the same record.

check_circleNo integration project, and no integration to maintain afterwards
check_circleOne price that covers the books and the filing together
check_circleA correction updates the ledger and the submission at the same time
check_circleOne team to call when something is wrong

Saudi Arabia · ZATCA phase 2

E-invoicing here is a live connection, not a new invoice template

Since phase 2 began, invoices in Saudi Arabia do not simply have to look right — they have to reach ZATCA. A business-to-business invoice is sent for clearance and stamped by the authority before you may give it to the customer. A consumer invoice is handed over immediately and reported within twenty-four hours.

Everything on this page was last checked against ZATCA's own published standards and announcements on 12 September 2026. Where a figure matters to a decision, the source is linked at the foot of the page so you can check it at source rather than take our word for it.

Who touches the invoice, and in what order

The order is different for the two kinds of document, and that difference is the whole of phase 2. Get it right and the rest follows.

You raise the invoice

In your accounting system, as you always have. Approving it fixes the number, the date and the totals.

The system signs it

A UBL 2.1 document is built to the Saudi standard and stamped with a certificate ZATCA issued to your solution unit.

It joins the chain

Every document carries a counter that only increases and the hash of the one before it, so the sequence cannot be altered unnoticed.

The customer gets it

With a QR code anyone can scan to verify it — and, for a tax invoice, only after ZATCA has cleared and stamped it.

ZATCA sits in the middle, not at the end

A standard tax invoice goes to the authority BEFORE the buyer sees it and comes back stamped; that stamped copy is the invoice. A simplified invoice goes to the buyer first and is reported within twenty-four hours. Neither is a monthly upload, and neither can be done in a batch after the fact.

There is no accredited service provider in this model. Your system talks to ZATCA directly, using a certificate issued in your own business name.

The dates that have applied, and the ones still coming

Phase 2 arrives in waves by taxable revenue, and ZATCA gives each wave at least six months notice. The thresholds have fallen with every wave.

4 December 2021 Phase 1 — generation
Electronic issue became compulsory for every VAT-registered business: no handwritten or scanned invoices, and a QR code on every simplified invoice.
1 January 2023 Phase 2 — integration begins
The first wave of large taxpayers connected their systems to ZATCA for clearance and reporting. Later waves have followed roughly every two months since.
30 June 2026 Wave 24 — above SAR 375,000
Businesses whose VAT-taxable revenue exceeded SAR 375,000 in 2022, 2023 or 2024 integrate from this date.
1 February 2027 Wave 25 — above SAR 187,500
The threshold falls again, to SAR 187,500 of taxable revenue in any year from 2022 to 2025 — which brings in most small businesses that are registered for VAT at all.

The revenue test looks at years that have already closed, so you can work out your own position today rather than waiting to be told. ZATCA notifies each wave directly; check the dates at source before you plan around them.

What to do about it, in the order it actually happens

None of this takes long. What takes longest is having the company details ZATCA validates, which is why they come first.

Check your company details
Your fifteen-digit VAT number, your commercial registration number, your legal name in Arabic, and a complete national address — street, four-digit building number, district, city and five-digit postal code. ZATCA validates these parts individually.
Fix your customer records
A business customer needs a VAT number on file, because that is what decides whether they get a tax invoice or a simplified one. Fixing it once in the customer record beats fixing it on every document.
Register a solution unit
A private key and a certificate request are generated inside the system. The key never leaves it and is never exported — ZATCA's list of prohibited functions names exporting the stamping key explicitly.
Generate a one-time password
From ZATCA's Fatoora portal: E-Invoicing, then onboard a new solution unit, then generate the code. It is valid for one hour.
Pass the compliance checks
Six sample documents are submitted and validated by ZATCA. This is where a missing company detail surfaces — on a sample, rather than on a real customer's invoice.
Rehearse, then go live
Walk the whole journey in ZATCA's simulation environment — clear, report, correct — before you switch to production. Nothing filed there is a real filing.

Are you in scope?

Phase 2 applies to you if

You are registered for VAT in Saudi Arabia.
Your VAT-taxable revenue exceeded your wave's threshold in any of the years it names.
You issue tax invoices to businesses, simplified invoices to consumers, or both.
You are a non-resident taxable person registered for VAT here — the obligation follows the registration, not the address.

It does not apply to

Businesses not registered for VAT in Saudi Arabia.
Exempt supplies made by a business that is not registered at all.
Purchases from a non-resident supplier under the reverse charge — you account for the tax, but there is no invoice of yours to clear.
Customs declarations on imports, which ZATCA already sees through the customs system.

If you are registered for VAT and above SAR 187,500 of taxable revenue in any year from 2022 onward, plan on being in scope rather than waiting for the letter.

What non-compliance costs

What happens	The consequence
Filing a VAT return late	5% to 25% of the tax due
Paying VAT late	5% of the unpaid tax for every month, or part of a month, of delay
E-invoicing breaches — not issuing electronically, no QR code on a simplified invoice, deleting or altering an invoice after it has been issued	A warning for a first instance, then fines that escalate with repetition, up to SAR 50,000

ZATCA publishes the current violations table and has periodically run amnesty and penalty-relief initiatives. Check the figures at source before relying on them for a decision — and note that late reporting of a simplified invoice is a breach in its own right, assessed per document, which is why reporting should be automatic rather than a task somebody remembers.

Two systems, or one

The usual answer to a clearance mandate is to keep your accounting software and buy a second product to talk to the authority. It works, and it costs more than the licence.

Accounting software plus a separate e-invoicing tool

Two subscriptions, two support contracts, two renewal dates.
Your customer and item data kept in step by an integration somebody has to own.
A rejection that arrives in one product and has to be fixed in the other.
No single place that can answer "is this invoice filed, and what did ZATCA say about it".

One system that does both

Raise the invoice and it is cleared or reported from the same screen.
A rejection names the rule and the field, and the field is one click away.
The VAT return is built from the same documents that were filed, so the two cannot disagree.
One subscription, in riyals, with e-invoicing included rather than priced per document.

See what it costs

We are not an accredited provider of anything, because Saudi Arabia does not accredit one: the connection is direct, from your system to ZATCA, with a certificate issued in your name.

Why it is worth having this in the ledger itself

Clearance is not a transmission problem. It is a data problem that shows up at the moment of transmission, and the data lives in your books.

A team reviewing financial reports together

The chain has to be continuous

Every document carries a counter that never resets and the hash of the one before it. That sequence can only be produced by the system that issues the documents.

Arabic is the document, not a translation

The invoice is issued in Arabic, and the Arabic title is printed on every copy — whatever language the person who raised it happens to work in.

Most rejections are customer data

A missing buyer VAT number or an incomplete national address used to be untidy. Now it is a rejected invoice, and the fix belongs in the customer record.

You should be able to rehearse

ZATCA runs a simulation environment that behaves exactly like production. Being able to walk the whole journey there, before it counts, is the difference between a planned go-live and a discovered one.

Corrections are documents

A cleared invoice cannot be edited or voided. Reducing it means a credit note; increasing it means a debit note. Both carry a reason and a reference to what they correct, and both are documents in their own right, filed the same way as the original.

VAT is not the only charge

Zakat, income tax and withholding on payments to non-residents each have their own base and their own deadline. They belong in separate accounts, because they are separate obligations.

Questions people actually ask

Do I need an accredited service provider?

No. Saudi Arabia does not route invoices through one. Your system connects to ZATCA directly, using a certificate issued in your own business name — which is why there is no per-document transmission fee in this model.

Can I keep issuing PDF invoices?

You can keep giving customers a PDF, but it is a rendering of the electronic invoice rather than the invoice itself. The document of record is the XML, and for a tax invoice it is specifically the copy ZATCA stamped and returned.

What happens if ZATCA is unreachable when I invoice?

A simplified invoice is given to the customer immediately and reported when the connection returns, inside the twenty-four-hour window. A standard invoice waits for clearance — which is why an outage is a queue rather than a data-entry backlog.

Does the invoice counter reset at a new financial year?

No, and it must not. ZATCA's published list of prohibited functions names invoice-counter reset and running more than one invoice sequence at a time explicitly. The counter carries on across years and across changes to your own numbering.

We invoice from two branches. Is that a problem?

No, but each solution unit is onboarded separately and gets its own certificate and its own chain. What is not allowed is two systems sharing one registration, because that forks the sequence.

Is this the same as the UAE mandate?

No. The UAE routes invoices through an accredited service provider on the Peppol network in PINT AE format. Saudi Arabia clears and reports directly with ZATCA in a Saudi UBL 2.1 profile, with a cryptographic stamp and a hash chain. Software built for one is not compliant in the other.

Where this comes from

Checked against these sources on 12 September 2026. If a date or a figure here matters to a decision you are making, read it at source.

menu_book Guides

Read the whole answer, not the summary

Sourced, dated walkthroughs of the things this page can only summarise: connecting to ZATCA, what belongs on a tax invoice, fixing a rejection, and filing the return box by box.

All guides

What the first hour looks like

Four steps, in this order, and you are working. Choosing Saudi Arabia at sign-up fills in most of them for you.

Your company Name, address and financial year. Choosing Saudi Arabia sets SAR as your base currency and picks the right time zone, so your first day's dates are already correct.
Your tax codes VAT at 15% is created for you, along with the zero-rated and exempt codes you will need for a mixed invoice.
Your chart of accounts A standard chart is created for you. Rename it, extend it or import your accountant's own — nothing here is locked.
Your opening balances Customers, suppliers, bank balances and stock on hand, entered or imported from a spreadsheet. After that you are simply working.

WisoBooks is a bookkeeping and business-management tool, not an accounting, tax or legal advisor. Nothing on this page is tax advice, and tax rules change. Confirm your own obligations with the relevant authority or a qualified advisor.