As part of Saudi Arabia’s digital transformation initiative, the Zakat, Tax and Customs Authority (ZATCA) introduced e-invoicing (Fatoorah) to enhance tax compliance, streamline transactions, and reduce the shadow economy. If your business operates in the Kingdom of Saudi Arabia (KSA), understanding ZATCA e-invoicing is not optional—it is mandatory.
This guide provides a complete overview of what ZATCA e-invoicing is, who it applies to, how it works, and how Splendid Accounts ensures your business stays fully compliant.
What Is ZATCA E-Invoicing?
ZATCA e-invoicing is the digital process of issuing, storing, and managing electronic invoices through a standardized system approved by the Zakat, Tax and Customs Authority of Saudi Arabia. It replaces traditional paper-based or PDF invoices with structured, electronic formats that can be validated and integrated directly with ZATCA’s systems.
There are two phases to the e-invoicing mandate:
Phase 2: Integration Phase
Starting from January 1, 2023, this phase requires businesses to integrate their invoicing systems directly with ZATCA’s platform to enable real-time invoice reporting and validation.
Phase 1: Generation Phase
In effect since December 4, 2021, this phase requires businesses to issue invoices in a structured electronic format, including mandatory fields such as buyer and seller information, VAT numbers, and a unique invoice number.
Who Needs to Comply?
ZATCA e-invoicing applies to:
- All VAT-registered businesses in Saudi Arabia
- Third parties issuing invoices on behalf of VAT-registered entities
- Exporters and service providers dealing with KSA-based customers
Exemptions apply only to specific industries or transactions explicitly outlined by ZATCA.
Types of E-Invoices Under ZATCA
ZATCA mandates the generation of two primary types of invoices:
Simplified Tax Invoices – For B2C transactions, used at point of sale (POS) or retail environments. These must also be generated electronically and include a QR code.
Tax Invoices – Issued for B2B transactions, requiring the buyer’s VAT registration number and including a cryptographic stamp and QR code.
Mandatory Requirements for E-Invoices
To be ZATCA-compliant, your e-invoices must meet the following criteria:
- Include all mandatory fields (e.g., VAT number, timestamps, invoice type)
- Be issued in Arabic (other languages may be used in addition)
- Be digitally signed and tamper-proof
- Contain a QR code and cryptographic stamp (for Phase 2)
- Use a ZATCA-enabled e-invoicing solution for integration and reporting
How Splendid Accounts Helps with ZATCA Compliance
Splendid Accounts offers a ZATCA-enabled e-invoicing module, fully equipped to help your business meet all regulatory requirements with ease.
Key Features:
- Structured electronic invoice generation in real-time
- Arabic invoice formatting with automatic field population
- QR code and cryptographic stamp embedding (Phase 2 ready)
- Seamless integration with ZATCA’s Fatoorah system (Phase 1, Phase 2)
- Automated invoice archiving and security
- Status reporting for non-compliant invoices
With Splendid Accounts, you don’t have to worry about compliance deadlines or technical challenges. We ensure your invoicing process is simple, secure, and fully aligned with ZATCA regulations.
Benefits of E-Invoicing in Saudi Arabia
- Improved tax transparency and compliance
- Faster and more efficient accounting processes
- Reduced errors and fraud risk
- Better audit readiness and financial reporting
- Enhanced integration
Final Thoughts
ZATCA e-invoicing is transforming the way businesses in Saudi Arabia handle invoicing and tax reporting. With deadlines already in effect, choosing a compliant and trusted e-invoicing partner is essential.
Splendid Accounts offers a seamless and ZATCA-enabled solution that takes the complexity out of compliance, letting you focus on growing your business.
Need help with e-invoicing in Saudi Arabia?
Contact our team or book a free demo to get started with a ZATCA-compliant solution today.