September 15, 2026

ZATCA Wave 25: who is in, what Phase Two of e-invoicing requires beyond Phase One, and how to plan a migration backwards from 1 February 2027

The short answer: if your Saudi business had VAT-subject revenue above SAR 187,500 in any of 2022, 2023, 2024 or 2025, you are in Wave 25 of ZATCA’s e-invoicing Integration Phase, and your invoicing system must be integrated with the Fatoora platform by 1 February 2027. ZATCA announced the criteria on 24 July 2026. If your accounting software cannot do that integration natively, the deadline is not an IT project with a plug-in at the end; it is the date by which you need to be running on a system that can, with your history intact. Below: what the notice says, what Phase Two adds, and how to plan backwards from February so the switch and the compliance date are one event.

What ZATCA announced, in its own words

The 24 July 2026 notice says Wave 25 “included all taxpayers whose revenues subject to VAT exceeded (SAR 187,500) during 2022, 2023, 2024 or 2025,” and that ZATCA “will notify all targeted taxpayers in the Twenty-Fifth Wave to integrate their E-invoicing solutions with the Fatoora Platform by no later than February 1, 2027.” Two details matter. The test is any one of four years, so a business that was above the threshold in 2022 and has since shrunk is still in. And the notice is a criteria announcement; the individual notification follows, and ZATCA says each wave is informed at least six months before its integration date.

For scale, Wave 24, announced 26 September 2025, covered revenue above SAR 375,000 in 2022, 2023 or 2024 with a 30 June 2026 deadline. The threshold has halved in one step and the look-back has grown by a year. Earlier waves stepped down from SAR 250 million in 2023 to SAR 1 million by the end of 2025. A Wave 26 with a lower threshold should be assumed, not hoped against.

Phase One versus Phase Two

Phase One, the Generation Phase, has applied since 4 December 2021. ZATCA describes it as the obligation to stop “handwritten invoices or computer-generated invoices through text editing software or spreadsheet software,” to use a compliant technical solution, and to generate and store e-invoices with the required fields, including the QR code.

Phase Two, the Integration Phase, adds three things in ZATCA’s summary: integrating the e-invoicing solution with the Fatoora platform, issuing e-invoices “based on a specific format,” and including additional fields in the invoice. Phase One was about the document; Phase Two is about the system that produces it talking to ZATCA, and a legacy package never built for the Saudi rules may not manage that without middleware you then own and pay for.

Why this is a migration question

Three situations put a Wave 25 business in front of a software decision rather than a settings change.

1. The system has no integration path. Discontinued products, region-locked editions and heavily customised installs cannot be connected to Fatoora by the vendor because the vendor is not developing them. Middleware exists, but it is a second system with its own subscription and its own vendor to chase in January.
2. The system can integrate, but the data cannot. Phase Two’s additional fields and format depend on clean master data: VAT registration numbers on every customer that needs one, Arabic and English names where the format expects them, sequential numbering with no gaps.
3. The business is already planning a move. If a move to QuickBooks Online or Xero was planned for 2027 anyway, doing it in Q4 2026 means one cutover and one compliance date instead of integrating the old system and then abandoning it.

In each case the question to ask the vendor is the same: is this edition of this product listed by ZATCA as a compliant solution for Phase Two, and is the integration native or through a third party? ZATCA maintains a directory of e-invoicing solution providers; confirm the listing yourself rather than taking a reseller’s word for it.

Planning backwards from 1 February 2027

The conversion itself is quick; the surrounding work is not. Working backwards:

1. By the end of October 2026: decide the destination system, confirm its Phase Two status, and scope how much history moves. The what does not convert post is the list to read before the scoping call.
2. November: clean the source. Merge duplicate customers and suppliers, fill VAT numbers, close or void stray open documents, and reconcile every bank and VAT control account to a date. For Tally files the Tally Prime cleanup checklist is the sequence; for Desktop files, run verify and rebuild first.
3. December: convert, and run the new system in parallel for at least one VAT period. Issue invoices from the new system, keep the old one read-only, and tie the VAT return to both.
4. January 2027: complete the Fatoora onboarding in the new system with a month of real invoices behind you, not on the last working day before the deadline.

The history question deserves its own line. Phase One invoices and the VAT returns built on them must remain retrievable for the retention period in the VAT rules, and ZATCA expects historical filings to stay supportable. A conversion that carries transaction detail keeps that trail in the live system; one that carries balances only leaves you dependent on an archived copy of the old software staying readable.

Routes we run for Saudi businesses

The common Wave 25 paths are Tally to QuickBooks and Tally to Xero for businesses leaving Tally, QuickBooks Desktop to Online for those on an old Desktop edition, and Zoho Books to QuickBooks where the group is consolidating on one platform. The Middle East page covers currency, VAT-period and Arabic-name handling across the Gulf, and the Gulf migration guide covers the FTA side for UAE entities in the same group. If those UAE entities are also mid-migration, UAE Corporate Tax records when you switch accounting software covers the retention window ZATCA does not.

Frequently asked questions

Who is in ZATCA Wave 25?

Every taxpayer whose revenues subject to VAT exceeded SAR 187,500 in any one of 2022, 2023, 2024 or 2025, according to ZATCA’s 24 July 2026 announcement. Fatoora integration is due by 1 February 2027; ZATCA notifies targeted taxpayers directly.

What is the difference between the Generation Phase and the Integration Phase?

The Generation Phase, in force since 4 December 2021, requires e-invoices from a compliant solution with the required fields and a QR code, and bans handwritten, text-editor and spreadsheet invoices. The Integration Phase adds integration with Fatoora, a specific invoice format and additional fields, and is rolled out in waves by revenue.

My revenue is below SAR 187,500. Am I exempt?

You are not in Wave 25. ZATCA has lowered the threshold with each wave and announces the next one at least six months before its date, so treat a further wave as likely and plan the system decision on that basis rather than waiting for the notice.

Can I integrate my current accounting software instead of migrating?

If the vendor lists that edition as a compliant Phase Two solution and the integration is native, yes. If it depends on middleware or a discontinued edition, the cost and risk usually exceed a managed migration to a compliant system, and the wave date is a natural cutover.

Related service: Tally → QuickBooks · Tally → Xero · QuickBooks support, Gulf