ZATCA's Wave 25 halves the Phase 2 threshold to SAR 187,500 and sets an integration deadline of 1 February 2027. Here is an integration plan for companies running SAP, Oracle EBS or their own ERP.
Saudi Arabia's Zakat, Tax and Customs Authority (ZATCA) continues to roll out Phase 2 (integration phase) of e-invoicing in waves. In July 2026, ZATCA announced Wave 25:
- Threshold: VAT-subject revenue above SAR 187,500, down from SAR 375,000 in Wave 24.
- Revenue years: if you exceeded the threshold in any single year from 2022 to 2025, you are in scope, even if your revenue has since dropped.
- Deadline: integration with ZATCA's FATOORA platform by 1 February 2027. ZATCA notifies targeted taxpayers directly.
Wave 24's deadline was 30 June 2026, and enforcement for that wave, with penalties reported in the range of SAR 5,000 to SAR 50,000, has applied since July 2026. Lowering the threshold brings many more small and mid-sized businesses into scope.
What Phase 2 requires from your system
- Invoices generated in the required UBL 2.1 XML format with the mandatory fields.
- A cryptographic stamp and QR code on each invoice, using certificates issued through ZATCA onboarding.
- Clearance of standard (B2B) tax invoices with ZATCA before they are shared with the buyer, and reporting of simplified (B2C) invoices within 24 hours.
- Invoice hashing and counters that chain invoices together, and secure archiving.
An integration plan for ERP users
- Confirm scope and dates. Check your revenue for 2022–2025 and watch for ZATCA's notification.
- Map your invoice flows. List every place invoices, credit notes and debit notes are created: ERP billing, POS, e-commerce and manual invoices.
- Choose the integration route. Options include your ERP vendor's e-invoicing solution, a certified middleware provider, or a direct integration built for your system.
- Fix master data. VAT numbers, buyer addresses and item tax categories must be complete and correct, or clearance will fail.
- Onboard and test in the sandbox. Generate certificates for each invoicing unit and test clearance and reporting with real scenarios.
- Go live early. Leave time before the deadline to deal with rejected invoices and edge cases.
SAP, Oracle EBS and custom ERP notes
- SAP: billing documents and output need to feed the XML generation and clearance step, and rejected invoices need a clear correction workflow. ABAP enhancements and interfaces are usually required, whatever middleware you use.
- Oracle EBS: Receivables transactions are the main source. Extensions typically capture the required data, call the clearance service and store the stamped XML and QR code against the transaction.
- Custom ERP: you can integrate directly with ZATCA's APIs, but plan for certificate management, hashing, retries and archiving, not just the API call.
How Level 8 can help
Our consultants work two hours ahead of Riyadh, on a Sunday-to-Thursday week if you need it, and support e-invoicing integrations for SAP, Oracle EBS and custom systems. Tell us about your setup and we'll suggest the shortest route to compliance.
This article is general information, not tax advice. Confirm your obligations with ZATCA or your tax adviser.