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May 30, 2023

Saudi Arabia announces fifth wave of Phase 2 e-invoicing integration

  • The Saudi Arabia Zakat, Tax and Customs Authority has announced the criteria for taxpayers to be included in the fifth wave of Phase 2 e-invoicing integration.
  • Taxpayers that are resident in Saudi Arabia, with a taxable turnover above SAR100m during the year 2021 or 2022, should comply with the Phase 2 e-invoicing requirements beginning 1 December 2023.

Executive summary

On 26 May 2023, the Saudi Arabia Zakat, Tax and Customs Authority (ZATCA) announced on its website that taxpayers resident in Saudi Arabia that have a taxable turnover exceeding SAR100m during calendar year 2021 or 2022 will fall within the fifth wave of Phase 2 e-invoicing integration and should comply with the Phase 2 requirements. The ZATCA will notify affected taxpayers so they can begin linking and integrating their electronic invoicing systems with the ZATCA's e-invoicing platform (Fatoora).

Further, the ZATCA Governor has issued Decision No. (63692) dated 10/25/1444 AH, which was published in the Official Gazette on 26 May 2023 and mentions that the fifth wave of affected taxpayers should comply with the Phase 2 e-invoicing requirements between 1 December 2023 and 31 March 2024.

Detailed discussion


On 4 December 2020, the ZATCA introduced e-invoicing in Saudi Arabia, releasing the E-Invoicing Regulation. E-invoicing in Saudi Arabia is being implemented in two phases:

  • Phase 1, effective from 4 December 2021, mandates generation of e-invoices and e-notes, including related processing and record keeping.
  • Phase 2, effective from 1 January 2023, mandates integration of a taxpayer's system with the ZATCA, along with transmission of e-invoices and e-notes to the ZATCA. This phase is being implemented in waves. The criteria and timelines for the first four waves, which were previously announced, are:





Turnover of more than SAR3b during calendar year 2021

1 January 2023 to 30 June 2023


Turnover of more than SAR500m up to SAR3b during calendar year 2021

1 July 2023 to 31 December 2023


Turnover of more than SAR250m during calendar year 2021 or 2022

1 October 2023 to 31 January 2024


Turnover of more than SAR150m during calendar year 2021 or 2022

1 November 2023 to 29 February 2024

*See Tax Alert 2022-5611.

**See Tax Alert 2022-6263.

***See Tax Alert 2023-5357.

****See Tax Alert 2023-0793.

The ZATCA has already notified resident businesses falling under the above waves to remind them of their obligation to comply with Phase 2 e-invoicing within their applicable timelines.

ZATCA announcement

Based on the latest announcements, the ZATCA will begin notifying taxpayers who fall within the fifth wave of Phase 2 e-invoicing integration to go live between 1 December 2023 and 31 March 2024.


Resident businesses should comply with the obligations of Phase 2 e-invoicing integration based on the ZATCA notification they received and undertake the relevant steps in making the required changes in their information technology systems. Taxpayers should comply with the Phase 2 requirements in line with the e-invoicing regulation to preclude the possible imposition of penalties.

Taxpayers that do not fall within the first five waves of Phase 2 e-invoicing integration should monitor future announcements from the ZATCA to learn when the integration timeline period applicable to them arises as part of subsequent waves.


For additional information with respect to this Alert, please contact the following:

EY Consulting LLC, Dubai

Ernst & Young Professional Services (Professional LLC), Riyadh

Ernst & Young Professional Services (Professional LLC), Jeddah

Ernst & Young Professional Services (Professional LLC), Al Khobar

Ernst & Young — Middle East, Bahrain

Ernst & Young LLP (United States), Middle East Tax Desk, New York

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor


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