ZATCA E-Invoicing Compliance: What Saudi Businesses Need to Know

The Zakat, Tax and Customs Authority (ZATCA) has mandated electronic invoicing for all VAT-registered businesses in Saudi Arabia. If you operate in the Kingdom, compliance is not optional - and the requirements are more technical than many businesses expect.

Phase 1 vs Phase 2

Phase 1 (Generation): All businesses must generate invoices electronically using a compliant system. No handwritten or PDF invoices. This phase has been active since December 2021.

Phase 2 (Integration): Invoices must be transmitted to ZATCA in real time or near-real time via API integration. Invoices require cryptographic stamps, QR codes, and UUID references. ZATCA is rolling this out in waves by taxpayer group.

Technical Requirements

• XML invoice format (UBL 2.1 standard)
• Cryptographic stamping using ZATCA-issued certificates
• QR code on every simplified invoice (B2C)
• UUID and hash chain for invoice integrity
• API integration with ZATCA platform for clearance (standard invoices) or reporting (simplified invoices)

ERP Integration

If you run Dynamics 365 F&O or Business Central, ZATCA compliance requires:

• Invoice data mapping from D365 to ZATCA XML schema
• Certificate management for cryptographic signing
• API connector to ZATCA clearance/reporting endpoints
• QR code generation embedded in the invoice print layout
• Error handling and retry logic for rejected invoices

Our ZATCA e-invoicing integration handles all of this - connecting your ERP directly to ZATCA with full compliance, automated clearance, and exception management.

How to Prepare

1. Check your ZATCA wave assignment and compliance deadline
2. Audit your current invoice process - are all required fields captured in your ERP?
3. Implement or update your ERP integration before the deadline, not after
4. Test with ZATCA sandbox environment before going live

Get ZATCA compliant →