.avif)
.avif)
.avif)
Saudi taxpayers with VAT-able revenue over SAR 187,500 in any year from 2022 to 2025 must integrate with ZATCA's Fatoora by 1 February 2027. What to do.
ZATCA's Wave 25 covers every Saudi taxpayer whose revenue subject to VAT was above SAR 187,500 in any of 2022, 2023, 2024 or 2025. Those businesses must connect their e-invoicing system to ZATCA's Fatoora platform by 1 February 2027, and ZATCA notifies them directly. A UAE group with a Saudi company should check that company now, because the UAE's own e-invoicing deadlines follow a few weeks later.
This wave is different from the ones before it. Earlier waves caught larger taxpayers with finance teams and ERP budgets. Wave 25 reaches down to small businesses, including those that registered for VAT voluntarily. Some of them still issue invoices from a spreadsheet or a basic accounting package.
If you own or run the finance side of a UAE-based group with a Saudi subsidiary, you are about to face two different e-invoicing regimes inside six months. The work is manageable if you start now. It gets expensive and stressful if you start in January.
Is your Saudi company in Wave 25?
Run through this checklist for each Saudi entity in your group:
Residence and registration: the company is resident in Saudi Arabia and registered for VAT.
Revenue test: its revenue subject to VAT exceeded SAR 187,500 in at least one of 2022, 2023, 2024 or 2025. One year is enough. It is not a 2025-only test.
Notification: ZATCA tells the taxpayers in each wave directly, so watch your registered email and ZATCA portal.
The SAR 187,500 figure matters. It is the voluntary VAT registration level in Saudi Arabia, while mandatory registration starts above SAR 375,000. In other words, Wave 25 sweeps in small VAT-registered businesses, including those that registered by choice.
Under Article 3 of the E-invoicing Regulation, the rules apply to taxable persons resident in Saudi Arabia. Non-residents are not required to issue e-invoices. A UAE company registered for Saudi VAT as a non-resident, with no Saudi company, is not required to issue Saudi e-invoices. If your group operates through a Saudi branch, confirm its residence status with ZATCA or a Saudi adviser before assuming either way.
If your Saudi revenue never passed SAR 187,500 in any of those four years, you are not in Wave 25. ZATCA says it will notify later waves at least six months before their integration date.
What Phase 2 integration means in practice
Saudi e-invoicing has two stages. Phase 1 (generation) has applied since 4 December 2021 and requires electronic invoices from a compliant system. ZATCA e-invoicing Phase 2 (integration) began on 1 January 2023 and has been rolled out in waves ever since. Under Phase 2, your invoicing solution connects directly to ZATCA's Fatoora platform.
Two flows run through that connection:
Clearance: standard tax invoices (to business customers) and their credit and debit notes go to ZATCA first, which checks them and adds its cryptographic stamp before they reach the buyer.
Reporting: simplified tax invoices (to consumers) go to the buyer straight away and are reported to ZATCA within 24 hours of being generated.
Every invoice is produced in XML, or as PDF/A-3 with embedded XML. It carries a cryptographic stamp and a QR code, and must contain the additional fields ZATCA specifies in its technical requirements.
The practical shift is that your sales invoices to businesses now depend on ZATCA's systems responding. A rejected invoice is not a valid invoice, so someone has to fix and resubmit it. Because e-invoices are tax invoices, failures fall under the penalty chapter of the VAT Law, as Article 4 of the Regulation makes clear.
UAE and Saudi e-invoicing side by side
The two countries reached e-invoicing by different routes. In the UAE, your accredited provider exchanges the invoice with the buyer's provider and reports tax data to the FTA. In Saudi Arabia, business invoices are cleared by ZATCA itself before the buyer receives them. Neither approach is better; they simply ask different things of your systems.
UAE | Saudi Arabia | |
|---|---|---|
Who runs it | Ministry of Finance and the FTA | ZATCA |
How invoices flow | Accredited provider sends to the buyer's provider and reports tax data to the FTA (five-corner model) | Fatoora clearance for business invoices; reporting within 24 hours for consumer invoices |
Who is in scope | Any business in the UAE; business-to-consumer excluded for now | Resident VAT-registered taxpayers, in waves |
Next deadline | AED 50m and over: live 1 January 2027. Under AED 50m: appoint by 31 March 2027, live 1 July 2027 | Wave 25: 1 February 2027 |
Who you contract with | A Ministry of Finance accredited provider (82 listed on 30 October 2026) | A compliant e-invoicing solution connected to Fatoora |
Timing rule | E-invoice within 14 business days (MD 197 of 2026) | Simplified invoices reported within 24 hours |
Penalties | Cabinet Decision 173 of 2026 | VAT Law penalty chapter |
The UAE dates come from Ministerial Decision 244 of 2025. For the wider structural comparison, see our guide on Saudi Arabia or the UAE for your regional base.
A plan to be live on Fatoora by 1 February 2027
The only legal date here is 1 February 2027. The steps below are a suggested order of work, not regulatory milestones.
Confirm you are in. Pull VAT-able revenue for 2022 to 2025 and watch for the ZATCA notice. Check announcements on ZATCA's website.
Check your system. Ask whether your current invoicing or ERP system has a compliant Phase 2 version. If not, choose a solution now rather than in December.
Connect and register. Onboard the solution with Fatoora, following ZATCA's integration steps for each device or unit that issues invoices.
Clean customer data. Clearance fails on bad data. Verify buyers' VAT numbers and addresses before the first live invoice.
Test with real samples. Run clearance and reporting using your actual invoice types: credit notes, multi-line orders, foreign-currency sales.
Train and set exceptions. Decide who fixes rejected invoices, how fast, and who tells the customer.
Go live early. Aim for a few weeks before 1 February 2027 so you can fix problems without a deadline over you.
Costs depend on invoice volume, the number of entities and branches, whether your ERP needs an upgrade or module, and how much ongoing support you want. A single-entity business issuing 80 invoices a month will spend very differently from a group with five branches.
Running both systems in one group
Look at the calendar. Saudi Wave 25 lands on 1 February 2027. UAE businesses under AED 50m must appoint an accredited provider by 31 March 2027 and go live on 1 July 2027. If your finance team is small, the same people will be doing both projects back to back.
What works in groups like this:
One owner for e-invoicing across the group, with authority over both countries.
One master data set for customers and suppliers, so VAT numbers and addresses are correct everywhere.
Check your ERP supports both the Saudi format and the UAE requirements, or know early that it does not.
Keep intercompany invoicing simple: fewer, cleaner invoices between group companies reduce rejections.
One trap: the UAE's temporary exclusion for transactions inside a UAE VAT group does not apply in Saudi Arabia. Tax invoices your Saudi company issues to group companies, including a UAE parent, still go through Fatoora. For the UAE side, read our piece on UAE e-invoicing penalties and accredited providers, and for wider structure, our guide to running a multi-entity group: filings and governance.
How Cosmos helps
Cosmos helps groups prepare for e-invoicing in the UAE and Saudi Arabia, working alongside the e-invoicing provider or solution you choose. We are not an accredited e-invoicing provider in either country and we do not sell e-invoicing software, so our advice is not tied to any product.
In practice, that means helping you work out which entities are in scope, cleaning master data, mapping intercompany flows and keeping both projects on one timeline. In the UAE, Cosmos also keeps the books and files corporate tax and VAT returns through an FTA-registered tax agent, which keeps invoice data and returns consistent.
Our e-invoicing support covers the UAE and Saudi Arabia only. If you are still structuring your Saudi presence, see our guides on setting up a business in Saudi Arabia and corporate tax and Zakat in Saudi Arabia.
Frequently asked questions
What is ZATCA Wave 25? It is the group of Saudi taxpayers whose revenue subject to VAT exceeded SAR 187,500 in 2022, 2023, 2024 or 2025. ZATCA announced it on 24 July 2026, and those taxpayers must integrate with Fatoora by 1 February 2027.
Which years' revenue counts? All four: 2022, 2023, 2024 and 2025. Passing SAR 187,500 in any one of them is enough.
My Saudi company's VAT-able revenue was SAR 150,000 every year: am I in Wave 25? No. You never crossed SAR 187,500, so Wave 25 does not apply. ZATCA will notify later waves at least six months before their date.
Does a UAE company registered for Saudi VAT, with no Saudi company, need to integrate? No. Non-residents are not required to issue e-invoices under Article 3 of the Regulation. If you have a Saudi branch, confirm residence status with ZATCA or a Saudi adviser.
Does Phase 2 apply to sales to consumers? Yes. Simplified tax invoices must be reported to ZATCA within 24 hours of being generated, though they are not cleared before the customer receives them.
Is a PDF invoice enough? No. A plain PDF does not meet the rules. Invoices must be XML or PDF/A-3 with embedded XML, with a cryptographic stamp and QR code.
Can my UAE e-invoicing provider also handle Saudi Arabia? Possibly, but ask directly. The Saudi requirements under ZATCA e-invoicing Phase 2 differ from UAE accreditation, so confirm the provider's solution connects to Fatoora.
What if ZATCA has not notified us? Check your revenue against the test anyway, and look at your ZATCA portal and registered email. If you meet the threshold, start preparing: 1 February 2027 is not far off, and the UAE deadlines arrive right behind it.
