ZATCA Phase 2 E-Invoicing Software for Saudi Arabia (2026 Guide)

If your business operates in Saudi Arabia, ZATCA Phase 2 (the Integration phase of the FATOORA e-invoicing programme) is no longer a future concern — it is rolling out in waves right now, and the revenue thresholds step down with every wave. Choosing the right e-invoicing software is one of the most consequential compliance decisions a Saudi business will make this year. This 2026 guide explains what Phase 2 integration actually requires, how to evaluate a solution, and gives an honest, fair view of the options — including Xrero (اكسريرو), our own cloud ERP and accounting platform.

One quick clarification: Xrero is not Xero. We are a separate, Dubai-based product serving the UAE and Saudi Arabia; Xero is a different company entirely.

Key takeaway: ZATCA Phase 2 requires your software to integrate directly with the Fatoora platform — generating signed XML invoices with a cryptographic stamp, UUID, QR code and sequential numbering, then either clearing standard (B2B) invoices in real time or reporting simplified (B2C) invoices within 24 hours. ZATCA publishes an indicative list of qualified solution providers and says the list is not an approval of the solutions; a business may use any compliant solution, listed or not, and compliance is the taxpayer's obligation. Choose a tool that genuinely supports the full Phase-2 flow, and verify the current wave and rules at zatca.gov.sa.

What is ZATCA Phase 2, and who does it affect?

Saudi Arabia's e-invoicing programme, FATOORA, has two phases. Phase 1 (the Generation phase) started on 4 December 2021 and applies to all resident taxpayers: you must generate and store compliant electronic invoices (structured XML, or PDF/A-3 with embedded XML) containing required fields such as the seller name, VAT registration number, timestamp and totals. There is no real-time link to ZATCA in Phase 1.

Phase 2 (the Integration phase) began rolling out in waves from 1 January 2023. This is the phase that demands software integration. ZATCA targets taxpayers group by group, by revenue threshold, and gives each group at least six months' advance notice of its go-live date. As of mid-2026:

• Wave 23 — integration deadline 31 March 2026, for taxpayers whose VAT-subject revenue exceeded SAR 750,000 in 2022, 2023 or 2024.
• Wave 24 — integration deadline 30 June 2026 (passed), for taxpayers whose revenue exceeded SAR 375,000 in 2022, 2023 or 2024.
• Wave 25 — integration deadline 1 February 2027, for taxpayers whose VAT-subject revenue exceeded SAR 187,500 in any of 2022, 2023, 2024 or 2025 (the current cohort).

The thresholds step down with each wave, progressively catching smaller businesses. Because new waves are announced periodically, treat the "latest wave" as a moving target and confirm your own wave on ZATCA's official page.

What Phase 2 integration technically requires

Phase 2 is materially more demanding than Phase 1. Your e-invoicing solution must be able to:

• Integrate via API with ZATCA's Fatoora platform — connecting your invoicing system (EGS, or e-invoice generation solution) to ZATCA directly.
• Onboard each device/solution through ZATCA's developer portal, generating a CSR and obtaining a cryptographic stamp identity (CSID).
• Produce a compliant XML invoice carrying a cryptographic stamp (digital signature), a UUID, a QR code and sequential numbering with a hash chain (each invoice references the previous one).
• Handle the two submission models correctly — described below.

Clearance vs reporting — get this right

This distinction trips up many buyers, so it is worth being precise:

• Standard (B2B) tax invoices require real-time clearance. The invoice is submitted to ZATCA, which clears it and applies its cryptographic stamp. The invoice is legally valid only after clearance.
• Simplified (B2C) invoices are reported within 24 hours of issuance. They are delivered to the customer immediately, then transmitted to ZATCA within a 24-hour window.

Some secondary write-ups loosely invert this. The accurate model is: clearance = standard/B2B, reporting within 24 hours = simplified/B2C. If a vendor's marketing gets this backwards, treat it as a warning sign.

ZATCA's solution-provider list — and how to read vendor claims

You will see software marketed as "ZATCA certified". Read these claims carefully. ZATCA publishes an indicative list of solution providers that have passed its qualification process, but it explicitly states that a taxpayer is considered compliant if they meet e-invoicing requirements even if their provider is not on that list. ZATCA says that list is not an approval of the solutions, and compliance ultimately attaches to you, the taxpayer — verified through ZATCA's Compliance & Enablement Toolbox and developer onboarding.

For that reason, Xrero describes itself as offering ZATCA Phase-2 support — helping you produce ZATCA-compliant e-invoices — and never as "ZATCA certified". When you see a competitor make the "certified" claim, understand it as the vendor's own marketing language rather than a guaranteed regulatory status.

How to choose a ZATCA Phase 2 solution

Use this checklist when evaluating any tool:

• Full Phase-2 flow. Does it actually onboard devices, sign invoices, generate the UUID/QR/hash chain, and both clear B2B and report B2C correctly?
• Native Arabic + English. Bilingual invoices and a bilingual interface for your team.
• Saudi VAT 15%. Correct VAT handling, including zero-rated and exempt supplies, and 15% as standard.
• Resilience. Retry logic, transmission logs, and a clear audit trail when ZATCA is briefly unreachable.
• Sandbox first. A proper sandbox/onboarding path before you go live in production.
• Scope fit. A standalone e-invoicing add-on may be enough; a growing business may prefer a full ERP that also runs accounting, inventory and sales.

Honest comparison of ZATCA Phase 2 options (2026)

Solution	ZATCA focus	Pricing (verify with vendor)	Best for
Xrero (اكسريرو)	Built in: clearance and reporting, tested on ZATCA's developer sandbox (18 Sep 2026); full ERP + accounting	SAR 101/user/month before VAT (billed in UAE dirhams, AED 1 ≈ SAR 1.02); 15-day trial included	Businesses wanting e-invoicing inside one bilingual ERP across KSA + UAE
Qoyod (قيود)	Purpose-built for KSA; Qoyod markets itself as ZATCA Phase-2 certified; strong automated e-invoicing	From SAR 100/month; higher tiers pricing on request; 14-day trial	Saudi-focused SMBs wanting a focused, Arabic-first invoicing tool
Daftra (دفترة)	All-in-one suite across GCC + Egypt; e-invoicing among bundled modules	From ~85 AED/month (annual); plan-based tiers; 14-day trial	Multi-country MENA businesses wanting low entry price and all apps bundled
QuickBooks Online	Globally mature accounting; lighter on Saudi-native ZATCA e-invoicing	From about USD 38/month (billed in USD); 30-day trial	Businesses prioritising a mature global ecosystem over deep local e-invoicing

A fair word on pricing models: Xrero is priced per user per month, while Qoyod and Daftra price by plan/feature tier (with user caps) and QuickBooks prices per company plan in USD. The cheapest option on paper depends entirely on your team size — so compare the model, not just the headline number. And to be genuinely fair: if your business is Saudi-only and you simply need a focused, Arabic-first invoicing tool with strong, automated ZATCA e-invoicing, a purpose-built tool like Qoyod may be the better fit than a full ERP.

Where Xrero fits

Xrero is an all-in-one cloud ERP and accounting platform for the UAE and Saudi Arabia, with bilingual Arabic and English throughout. On the Saudi side it ships the Saudi chart of accounts, VAT at 15% with correct treatment of zero-rated and exempt supplies, and ZATCA Phase 2 e-invoicing: tax invoices are cleared, simplified invoices are reported within 24 hours, with the cryptographic stamp, QR code and XML the regulation requires. We tested it on ZATCA's developer sandbox on 18 September 2026 (all six compliance document types accepted; clearance, reporting and a credit note accepted with zero warnings); details on xrero.com/saudi.

To be clear and honest: Xrero does not claim to be "ZATCA certified". ZATCA's solution-provider list is an indicative, non-binding list of providers that passed its qualification process, and ZATCA says it is not an approval of the solutions. SIF International (sif.xrero.com), Xrero's provider in Saudi Arabia, applied on 28 September 2026 to be listed; the application is under review. Xrero's real advantage is breadth: e-invoicing lives inside a single platform that also runs your accounting, inventory and sales, across both the Saudi and UAE markets, at a transparent SAR 101 per user per month before VAT (billed in UAE dirhams, AED 1 ≈ SAR 1.02), with a 15-day trial included.

Frequently asked questions

What is the difference between ZATCA Phase 1 and Phase 2?

Phase 1 (Generation), live since 4 December 2021, requires you to generate and store compliant electronic invoices but with no real-time link to ZATCA. Phase 2 (Integration), rolling out in waves since 1 January 2023, requires your software to integrate directly with ZATCA's Fatoora platform, adding a cryptographic stamp, UUID, QR code and sequential numbering, plus real-time clearance for B2B and 24-hour reporting for B2C.

Is my business required to comply with ZATCA Phase 2 yet?

It depends on your revenue and your assigned wave. Wave 23 (revenue over SAR 750,000) had a 31 March 2026 deadline and Wave 24 (revenue over SAR 375,000) a 30 June 2026 deadline; both have passed. The current cohort is Wave 25: VAT-subject revenue over SAR 187,500 in any of 2022, 2023, 2024 or 2025, with integration due by 1 February 2027. Thresholds step down with each new wave, and ZATCA gives at least six months' notice. Confirm your specific wave and deadline at zatca.gov.sa.

Does ZATCA "certify" e-invoicing software?

ZATCA qualifies e-invoicing solution providers and publishes an indicative list of those that passed its qualification process; it says the list is not an approval of the solutions, and a taxpayer is compliant if it meets the requirements even if its provider is not listed. Compliance attaches to you, the taxpayer. That is why Xrero describes itself as offering "ZATCA Phase-2 support".

What is the difference between clearance and reporting?

Standard (B2B) tax invoices require real-time clearance: they are submitted to ZATCA, cleared and stamped, and are only legally valid after clearance. Simplified (B2C) invoices are delivered to the customer immediately and then reported to ZATCA within 24 hours of issuance.

Does Xrero support ZATCA Phase 2?

Yes. Xrero issues, stamps and transmits ZATCA Phase 2 documents — clearance for tax invoices, reporting for simplified invoices, credit and debit notes — and was tested on ZATCA's developer sandbox on 18 September 2026 (all six compliance document types accepted; clearance, reporting and a credit note accepted with zero warnings). Xrero does not claim to be "ZATCA certified"; ZATCA's solution-provider list is indicative and not an approval of the solutions. SIF International, Xrero's provider in Saudi Arabia, applied on 28 September 2026 to be listed, and the application is under review. Compliance remains your obligation. Details: xrero.com/saudi.

What is the Saudi VAT rate in 2026?

The standard Saudi VAT rate is 15%, in force since 1 July 2020 and unchanged in 2026, alongside zero-rated (0%) and exempt categories. VAT is administered by ZATCA.

This is general information, not tax, legal or purchasing advice — verify current details with the vendor and with ZATCA (zatca.gov.sa). For details, see Xrero features in Saudi Arabia or review Xrero pricing in Saudi Arabia (SAR).