Insights & Strategy

Saudi E-Invoicing Wave 25: What Small Businesses Need Ready by February 2027

Ascent24 Technologies
5 min read
Financial reports, charts, a calculator and banknotes on a desk, with the Ascent24 logo

If your business is registered for VAT in Saudi Arabia and your taxable revenue went above SAR 187,500 (about USD 50,000) in 2022, 2023, 2024 or 2025, you are likely in Wave 25 of ZATCA's e-invoicing integration phase. Your billing system has to be connected to ZATCA's Fatoora platform by 1 February 2027. That is less than three months away, and for most small firms the hard part is getting the billing software ready.

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What ZATCA announced

ZATCA set out the Wave 25 criteria on 24 July 2026. The Governor's decision was published in the Official Gazette the same day. The wave covers every taxpayer whose revenue subject to VAT exceeded SAR 187,500 in any one of the four years from 2022 to 2025. ZATCA says it will notify the businesses in this wave directly.

Two details matter for smaller firms:

  • The threshold has dropped fast. Wave 23 started at SAR 750,000 and Wave 24 at SAR 375,000. Wave 25 halves it again, which pulls in many shops, service firms and small distributors for the first time.
  • 2025 revenue now counts. This is the first wave to include 2025. A business that only started trading in 2025, or one that stayed below the line until last year, can still be in scope.

What Phase 2 changes for you

Most Saudi businesses already issue electronic invoices under Phase 1, which started on 4 December 2021. Phase 1 only asked you to generate and store invoices from a compliant system, with the required fields and a QR code.

Phase 2, the integration phase, goes further. Your invoicing solution must connect to Fatoora, issue invoices in ZATCA's set electronic format, and carry extra fields. In practice, standard tax invoices to other businesses are sent to ZATCA for clearance before you share them with the customer, and simplified invoices to consumers are reported to ZATCA after they are issued. Check the current technical guides on ZATCA's e-invoicing pages for the exact rules that apply to your invoice types.

The real test is whether your system can produce the right file, connect to Fatoora and handle a rejected invoice without holding up your sales.

A readiness checklist for the next three months

  1. Confirm you are in scope. Look at your VAT returns for 2022 to 2025. If any year is above SAR 187,500, plan for Wave 25 now, and watch for ZATCA's notification rather than waiting for it.
  2. Ask your software vendor a direct question. Does your billing, POS or ERP system support Phase 2 integration with Fatoora today, and which version do you need? Get the answer in writing, with a date.
  3. List every place you issue invoices. Shop tills, an online store, a field sales app, a spreadsheet someone still uses for one big client. Each one needs a compliant path to Fatoora.
  4. Clean your customer data. B2B invoices need correct buyer details such as VAT numbers and addresses. Missing or wrong data is a common reason invoices fail.
  5. Test before go-live. Use ZATCA's test environment for developers and solution providers, and run real invoice types: credit notes, discounts, returns and foreign currency if you use it.
  6. Plan the cutover. Pick a quiet week, train the staff who raise invoices, and decide who handles a rejected invoice on day one.

Common mistakes

  • Waiting for the notification before starting. Vendor upgrades and testing take weeks.
  • Assuming an older or locally customised accounting package will just work. Custom fields and hand-built invoice templates often break first.
  • Fixing only the main system and forgetting the side channels, like a website checkout or a sales rep's app.
  • Treating it as an IT task only. Finance needs to own the invoice data rules.

Where Ascent24 can help

If your current system cannot connect to Fatoora, you usually have three options: upgrade it, move to a solution that already supports Phase 2, or build a connector between your existing system and a compliant e-invoicing solution. Ascent24 builds custom software and system integrations, so we can help you review your invoicing flow, map the data and connect the systems you already use. We are not a ZATCA-listed solution provider, and we will tell you if an off-the-shelf upgrade is the simpler route.

For a similar deadline in the UAE, see our guide on getting your billing and ERP data ready for UAE e-invoicing.

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FAQs

Who is in Wave 25 of Saudi e-invoicing?

Saudi VAT taxpayers whose revenue subject to VAT exceeded SAR 187,500 in 2022, 2023, 2024 or 2025. ZATCA notifies the businesses in the wave directly.

What is the Wave 25 deadline?

Businesses in Wave 25 must integrate their e-invoicing solutions with the Fatoora platform by 1 February 2027.

My business started in 2025. Can I still be in Wave 25?

Yes. Wave 25 is the first wave to count 2025 revenue, so a business that passed SAR 187,500 in 2025 can be in scope even if it did not exist in earlier years.

What if my revenue is below SAR 187,500 in every year?

You are not in Wave 25. Phase 1 rules still apply to you, and ZATCA says it will tell later waves at least six months before their integration date.

Sources

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