For most VAT-registered businesses in Saudi Arabia, Phase 1 of e-invoicing meant producing invoices electronically, with a QR code on each one. Phase 2, the integration phase, changes who sees your invoices and when: every invoice is signed and sent to ZATCA, and some must be cleared before your customer receives them.
ZATCA brings businesses into Phase 2 in waves and notifies each one ahead of its date. That notice period is your time to prepare, and most of the work is not technical at all. It is about clean data and clear habits.
What actually changes in Phase 2
Two kinds of invoice are treated differently. A standard tax invoice, the kind you issue to another VAT-registered business, is cleared: it goes to ZATCA first and is only valid once it comes back accepted. A simplified invoice, the kind a shop counter or a hotel front desk gives a consumer, is reported after it is issued, within 24 hours.
Each invoice is also signed with a certificate tied to your business, and invoices are linked in sequence. Once an invoice has been cleared or reported, it cannot be quietly edited afterwards. A mistake is corrected with a credit or debit note, not by changing the original.
Get your data right first
Most rejected invoices fail for ordinary reasons: a missing building number, a customer VAT number with one digit wrong, a branch address that is out of date. Fix these before your wave date, not on it.
- Your company name, VAT number and CR number, exactly as registered.
- A complete national address: building number, street, district, city, postal code and additional number.
- For every business customer, their VAT number and full address.
- For each branch, whether it trades from the company address or from premises of its own, and whether it has a separate registration.
Connecting your invoicing
In Nizam the onboarding itself takes a few minutes. You need access to the FATOORA portal, where ZATCA issues the one-time code that links an e-invoicing solution to your business.
- Open your company settings and check the details above against your registration certificate.
- Sign in to the FATOORA portal and generate an OTP for onboarding a new solution.
- In Nizam, open the Tax authority settings, choose Connect and enter the code before it expires.
- Issue a test invoice to a business customer and confirm it comes back cleared, then a simplified one and confirm it is reported.
- Brief everyone who raises invoices: once an invoice is issued, it is final.
Habits worth changing now
Use drafts. Keep an invoice as a draft until the customer, lines and prices are right, because a draft is not reported and does not count in your books. Check that nothing is priced at zero: a line that says something was sold for nothing will be refused, since it would otherwise be numbered, signed and reported like any other. And agree who on your team may issue invoices, so that final documents come from people who know they are final.
Phase 2 rewards businesses that already invoice carefully. Spend the notice period tidying your customer records and your habits, and the switch itself becomes a quiet afternoon rather than a deadline.