ZATCA Phase 2 Wave 25: SAR 187,500 Checklist

Quick answer: ZATCA Phase 2 Wave 25 covers VAT-registered businesses in Saudi Arabia whose VAT-taxable revenue exceeded SAR 187,500 in any of 2022, 2023, 2024 or 2025. They must integrate their e-invoicing solution with ZATCA's Fatoora platform by 1 February 2027. That leaves roughly 14 weeks from late October 2026 to choose a compliant system, onboard every invoicing unit and test.

Wave 25 is the widest ZATCA Phase 2 wave so far. The threshold halves Wave 24's SAR 375,000, and for the first time 2025 revenue counts. This post is a practical readiness checklist for Wave 25 specifically. If you need the background first (Phase 1 vs Phase 2, standard vs simplified invoices, invoice fields), read our full ZATCA e-invoicing guide and come back.

Important: This is general information, not tax or legal advice. ZATCA can update its technical rules and wave announcements. Confirm your status on ZATCA's official Wave 25 announcement and the ZATCA e-invoicing pages, or ask a Saudi tax adviser.

What is ZATCA Phase 2 Wave 25?

ZATCA rolls out Phase 2 (the "integration phase") in waves. Each wave is defined by VAT-taxable revenue in past years, and taxpayers in that wave must connect their e-invoicing solution to Fatoora by a fixed date. ZATCA announced Wave 25 in July 2026, and a ZATCA Governor's decision published in the Official Gazette sets the compliance date.

	Wave 24	Wave 25
Revenue criterion	Over SAR 375,000 (in 2022 or 2023)	Over SAR 187,500 in 2022, 2023, 2024 or 2025
Integration deadline	30 June 2026	1 February 2027
Years tested	Two	Four, including 2025 for the first time

SAR 187,500 is also the voluntary VAT registration threshold in Saudi Arabia (mandatory registration starts at SAR 375,000). In practice, Wave 25 reaches most small VAT-registered businesses that were not already covered by earlier waves.

Who must comply with Wave 25?

You are likely in Wave 25 if all of the following are true:

• You are a resident taxpayer registered for VAT in Saudi Arabia.
• Your VAT-taxable revenue was more than SAR 187,500 in at least one of 2022, 2023, 2024 or 2025.
• You were not already selected in an earlier wave.

Revenue here means the revenue subject to VAT, as reported in your VAT returns. Use your filed returns, not management accounts, to check each year. Certain categories are excluded from e-invoicing entirely under ZATCA's regulation, so confirm whether an exclusion applies to you before assuming either way.

Worked example: does this business cross SAR 187,500?

A Jeddah interior design studio registered for VAT voluntarily. Its VAT-taxable revenue, taken from its returns:

Year	VAT-taxable revenue (SAR)	Above SAR 187,500?
2022	148,000	No
2023	171,500	No
2024	184,900	No (SAR 2,600 below)
2025	203,750	Yes (SAR 16,250 above)

The arithmetic: 184,900 is 2,600 short of 187,500, but 203,750 minus 187,500 = 16,250 over. One qualifying year is enough, so the studio is in Wave 25 and must integrate by 1 February 2027. Under the Wave 24 rules it would have stayed out, because neither its 2022 nor 2023 revenue came close to SAR 375,000.

What ZATCA integration requires in practice

ZATCA e-invoicing requirements for the integration phase are technical, but you only need to understand what your system must do, not how to code it:

• Structured XML: every tax invoice, credit note and debit note is produced as UBL 2.1 XML (a PDF/A-3 with the XML embedded can be shared as the readable copy).
• Cryptographic stamp: each invoicing unit (ZATCA calls it an EGS unit, an e-invoice generation solution) holds a cryptographic stamp identifier (CSID) and signs every invoice.
• Hash chain and counter: each invoice carries a UUID, its own hash, the previous invoice's hash and an invoice counter, so gaps or edits are detectable.
• Clearance for standard invoices: B2B standard tax invoices are sent to ZATCA and must be cleared before you share them with the buyer.
• Reporting for simplified invoices: B2C simplified invoices are given to the customer first and reported to ZATCA within 24 hours.
• QR code: mandatory on simplified invoices and including cryptographic data in Phase 2. Our explainer on the QR code on an invoice compares ZATCA's QR with other countries' versions.

This is a clearance-style model, the same family as India and Turkey rather than Europe's Peppol networks. Our comparison of the clearance model vs Peppol explains the difference if you also trade with the EU or the UAE.

Fatoora integration: the onboarding steps

Fatoora integration follows the same sequence for every wave. Your software provider usually drives the technical parts, but you control the portal access and the one-time passwords.

1. Log in to the Fatoora portal with your ZATCA credentials and confirm the business details ZATCA holds for you.
2. Generate a one-time password (OTP) for each EGS unit you want to onboard. Every POS terminal, branch system or ERP instance that issues invoices counts as a unit.
3. Create a certificate signing request (CSR) from your solution, using the OTP. Your vendor's software does this.
4. Receive a compliance CSID and run the compliance checks: sample standard and simplified invoices, credit notes and debit notes, as your solution supports.
5. Receive the production CSID once the checks pass. From this point the unit is live and must clear or report real invoices.
6. Monitor rejections and warnings in your system and on the portal during the first weeks.

Leave time between steps 4 and 5. Compliance checks are where incorrect VAT categories, missing buyer data and rounding differences show up.

ZATCA Wave 25 readiness checklist

Work backwards from 1 February 2027. A realistic plan for a small business:

By	Task	Done when
Early November 2026	Confirm Wave 25 status from VAT returns and the Fatoora portal	You have a written yes/no with the qualifying year
Mid November 2026	Choose a Phase 2 capable solution or confirm your current vendor's upgrade	Signed contract and an onboarding date
Late November 2026	List every EGS unit: branches, tills, ERP, online store	An inventory with an owner per unit
December 2026	Clean customer master data: legal names, addresses, VAT numbers	Every B2B customer has a validated VAT number
December 2026	Map invoice scenarios: returns, deposits, discounts, exports, zero-rated lines	Each scenario has a tested sample
Early January 2027	Run compliance checks and obtain production CSIDs	All units onboarded
January 2027	Train staff on clearance, rejections and credit notes	Staff can issue and correct invoices unaided
1 February 2027	Go live and monitor daily	No unresolved rejections after the first week

Questions to ask your e-invoicing provider

• Have you onboarded customers in earlier waves, and can you show it working end to end?
• How do you handle simplified invoices when the connection to ZATCA is down, and how do you guarantee reporting within 24 hours?
• Do you support credit notes against both standard and simplified invoices, including partial returns?
• Can your invoices show Arabic alongside English? See our Arabic-English invoice guide for layout tips.
• Where is the XML archive stored, and can you export it if you change vendor?
• What is the pricing model: per invoice, per unit, or per month?

Worked example: a simplified invoice after go-live

From 1 February 2027, the Jeddah studio sells a set of cushions to a walk-in customer. The price is shown VAT-inclusive at SAR 460.

• Net price: 460 ÷ 1.15 = SAR 400.00
• VAT at 15%: 400 × 0.15 = SAR 60.00
• Total: 400 + 60 = SAR 460.00

The POS creates a simplified tax invoice in XML, signs it, prints the receipt with the Phase 2 QR code and hands it over. Within 24 hours the system reports the XML to ZATCA. If the same customer were a VAT-registered company buying for its office, the studio would issue a standard tax invoice with the buyer's VAT number and wait for ZATCA clearance before sending it. You can double-check VAT-inclusive arithmetic with our sales tax calculator, but the invoice itself must come from the integrated system.

Common Wave 25 mistakes

• Waiting for a notification. Scope follows the revenue test. Check yourself.
• Onboarding one unit and forgetting the others. A second branch till or a website checkout that issues invoices also needs a CSID.
• Editing an issued invoice. Corrections are made with credit or debit notes. Our credit note guide explains the logic.
• Bad buyer VAT numbers. Standard invoices fail clearance when the buyer's VAT number or address is wrong.
• Restarting invoice numbering. Phase 2 chains invoices, so numbering and counters must be continuous per unit.
• No archive plan. The XML is the legal record. Check ZATCA's retention rules and our overview of how long to keep invoices.

Penalties for missing the Wave 25 deadline

ZATCA's e-invoicing penalty schedule covers failing to issue electronic invoices, missing required elements, failing to integrate or report, and deleting or altering invoices. ZATCA has said it may issue warnings before fines for some first violations. Penalty amounts are set in regulation and can change, so use the figures on ZATCA's website rather than numbers quoted in vendor marketing.

Where a free invoice generator still fits

Our free invoice generator runs in your browser and exports a PDF. It does not produce UBL XML, sign invoices, hold a CSID or connect to ZATCA, so it cannot be your tax invoicing system once you are in Wave 25. It remains useful for quotations, proformas and price estimates before a sale, and for businesses that are not VAT-registered and simply need a clear bill (without calling it a tax invoice or showing VAT). The Corporate template keeps tax IDs and notes easy to read for those uses. Our guide to e-invoices vs PDF invoices explains why a PDF alone does not count.

Next step

Pull your VAT returns for 2022 to 2025 today and check each year against SAR 187,500. If any year is over, log in to the Fatoora portal, list your invoicing units and book an onboarding date with your provider before the end of November 2026. For the wider rules behind Phase 2, keep the ZATCA e-invoicing guide open alongside this checklist.