ZATCA e-invoicing software: what Phase 2 requires

What ZATCA e-invoicing software has to do

ZATCA e-invoicing software is an invoicing or ERP system that can be onboarded to the Fatoora platform and then send every invoice to ZATCA: standard tax invoices for clearance before the buyer receives them, simplified tax invoices for reporting within 24 hours. To be ready, a Saudi business needs onboarded software, a cryptographic stamp, QR codes and a credit note process.

This page is for owners and finance staff who must choose software before their Phase 2 wave date. It lists what the software must do, how to compare products without relying on labels, what it costs in Saudi riyals, and where Skyline Nexus ERP fits. For the background on the regulation itself, see our guide to ZATCA Phase 2 e-invoicing; for your deadline, see our guide to the integration waves.

Who needs Phase 2 software, and by when

Phase 1, the generation phase, has applied since 4 December 2021: resident taxpayers must issue and store invoices electronically. Phase 2, the integration phase, has applied since 1 January 2023 and is rolled out in waves of taxpayers. ZATCA says it notifies each wave at least six months before its integration date.

The latest wave as of October 2026 is Wave 25, announced by ZATCA on 24 July 2026. It covers taxpayers whose revenue subject to VAT exceeded SAR 187,500 in 2022, 2023, 2024 or 2025, and they must integrate their e-invoicing solution with Fatoora by 1 February 2027. That threshold is half the mandatory VAT registration threshold of SAR 375,000, so many small shops, workshops and service firms that registered voluntarily are now in scope.

If you have received a ZATCA notification, the date in it is the one that counts. If you have not, check your revenue for each year from 2022 to 2025 against the wave thresholds and plan as if you will be notified.

Requirements checklist for Phase 2 software

ZATCA's E-Invoicing Detailed Guidelines set out what a compliant e-invoice generation solution (EGS) must do. In buyer terms, the software must cover each of these points, and you should be able to see each one working in a trial.

• Onboarding: each EGS unit is registered on the Fatoora portal with a cryptographic stamp identifier (CSID), which can be renewed or revoked.
• Standard tax invoices (mostly B2B): generated in XML, sent to Fatoora for clearance, and only shared with the buyer after ZATCA has stamped them.
• Simplified tax invoices (mostly B2C): stamped by your system, given to the customer with a QR code, and reported to Fatoora within 24 hours.
• Credit and debit notes linked to the original invoice, because a cleared or reported invoice cannot simply be edited.
• The buyer copy of a standard invoice in XML or PDF/A-3 with the XML embedded.
• Clear error and warning messages from ZATCA per invoice, so rejected invoices are fixed the same day.
• Every field a tax invoice needs, including both VAT numbers on standard invoices (see our guide to what makes a tax invoice ZATCA-compliant).
• Numbering and invoice layouts per branch, so each shop or warehouse issues its own sequence.

How to choose: five tests that matter more than a label

Many sales pages say ZATCA approved. What ZATCA's guidelines actually describe is onboarding: your own solution passes compliance checks and receives a production CSID on Fatoora. So the useful test is not a badge but whether the software takes you through that onboarding and keeps working afterwards. Ask each vendor to show the following in a trial account.

• The onboarding steps on screen: generate the request, obtain a compliance CSID, run the compliance check, then obtain the production CSID.
• A rejected invoice: what message appears, who sees it, and how the corrected invoice is resubmitted.
• A return: issue a credit note against a cleared invoice and check that the VAT report and the ledger both reverse.
• Reporting of POS sales: how simplified invoices are queued and sent if the internet drops for an hour.
• Everything after the invoice: stock, accounting, the VAT return and Zakat. Phase 2 is one obligation; the books still have to close every month.

What Phase 2 software costs in Saudi Arabia

Prices for ZATCA e-invoicing software usually follow one of three models: a per-branch or per-device fee for POS systems, a per-user subscription for accounting and ERP systems, or a one-off licence plus annual support for installed software. Before you compare totals, ask whether onboarding support, extra branches, extra POS devices and the VAT on the subscription are included.

Skyline Nexus ERP Solo costs SAR 69 a month plus 15% VAT (SAR 79.35) for one user and one branch, with ZATCA Phase 2, accounting, inventory and POS in the same plan. Every plan starts with a free first month. Under the launch offer, valid until 31 January 2027, Solo costs SAR 34.50 a month for the first 3 months, then SAR 69 a month; on annual billing, SAR 690 covers 15 months instead of 12.

For a VAT-registered business, the VAT on the subscription is normally recoverable as input tax, so the ex-VAT figure is your real cost. Prices on this page were checked on 3 October 2026; confirm the current price on the pricing page before you subscribe.

Worked example: a Wave 25 trading shop

Take a small Riyadh shop selling building supplies. Its revenue subject to VAT was SAR 240,000 in 2025, above the Wave 25 threshold of SAR 187,500, so it plans to integrate before 1 February 2027. It sells to walk-in customers at the counter and to two contractors on account.

A contractor invoice for 20 bags of tile adhesive at SAR 45 is SAR 900 plus VAT at 15% of SAR 135, total SAR 1,035. As a standard tax invoice it goes to Fatoora for clearance first, and the contractor receives the cleared invoice with its QR code. A counter sale of SAR 200 plus SAR 30 VAT is a simplified invoice: the customer gets a printed receipt with a QR code at once, and the system reports it within 24 hours.

Software cost on Skyline Nexus ERP Solo for the first 12 paid months after the free month: at the regular price, 12 x SAR 69 = SAR 828 ex VAT. With the launch offer on monthly billing, 3 x SAR 34.50 + 9 x SAR 69 = SAR 724.50 ex VAT. On the annual launch offer, SAR 690 ex VAT (SAR 793.50 with VAT) covers 15 months, about SAR 46 a month.

What to prepare before onboarding day

Onboarding takes an afternoon when the data is ready and weeks when it is not. Work through this list before you start the trial of any Phase 2 product, and keep the trial open long enough to test a full week of real transactions, including a return and a discount.

If you use an accountant, agree who owns each step. The accountant usually reviews tax codes and the VAT return; the business owns the master data, the branches and the daily invoicing.

• Your VAT registration certificate, commercial registration and the exact legal name and address in Arabic.
• Customer master data: the VAT number and full address of every business customer you invoice.
• A list of branches, POS counters and invoicing devices, because each needs its own setup and numbering.
• Tax codes for standard-rated, zero-rated and exempt items, with the exemption reason codes your accountant uses.
• A named person who reads ZATCA rejection messages every day during the first month.

Mistakes that delay go-live

Most failed go-lives are not software failures. They are data and process gaps that surface the day the first invoice is rejected.

• Customer records with a missing VAT number or address, so standard invoices fail validation.
• Editing or deleting an invoice after it was reported, instead of issuing a credit note.
• Onboarding one branch and forgetting that every POS or invoicing unit needs its own setup.
• Leaving the switch to the last week, with no time to test returns, discounts and mixed VAT rates.
• Treating Phase 2 as an invoicing project only, when the VAT return and the ledger must agree with what was sent to ZATCA.

Penalties and the current fines waiver

Phase 2 sits inside the wider VAT regime, where late registration, late filing and late payment carry penalties. ZATCA's cancellation of fines initiative, which covers late registration, late payment and late filing penalties, has been extended to 31 December 2026; it excludes tax evasion penalties. The waiver does not move your wave date, so treat 1 February 2027 as fixed if you are in Wave 25.

ZATCA Phase 2 in Skyline Nexus ERP

Skyline Nexus ERP has a ZATCA area under Settings, Zakat, Tax and Customs Authority, with screens for Configuration, Compliance CSID, Compliance Check, Production CSID and Renew CSID, so onboarding follows the ZATCA steps on screen. Invoices are then cleared or reported from the system, with XML and QR download, ZATCA error and warning messages per invoice, and a bulk send for reporting invoices. A guided walkthrough takes a new user through ZATCA onboarding. Once an invoice is reported or cleared it is frozen, and the correction is a credit note (381) or debit note (383); sales returns post the reversing entries to the ledger when auto-posting is on.

Each branch has its own invoice numbering scheme and its own layouts for simplified and standard invoices, and the POS with cash registers issues the simplified invoices. Sales, purchases and payments post to the general ledger automatically once the auto-post settings are switched on, and the VAT return form is prefilled from the same documents. The interface works in Arabic and English.

What Skyline Nexus ERP does not do for you: it does not file your VAT return or Zakat return on the ZATCA portal (you submit them there, using the prefilled VAT return and the Zakat working paper), it has no direct bank feeds (statements are imported as CSV or Excel files), and it does not connect to e-invoicing platforms outside Saudi Arabia. Start the free month on Solo at SAR 69 a month and run your own ZATCA onboarding test before your wave date.