ZATCA Phase 2 E-Invoicing in ERPNext
ZATCA Phase 2 requires every invoice to be signed XML sent to the Fatoora platform: B2B invoices are cleared before you issue them, B2C invoices are reported within 24 hours. ERPNext does this with an open-source ZATCA app; we install it, onboard your devices and support it.
- Platform
- ZATCA Fatoora
- B2B (standard)
- Clearance before issue
- B2C (simplified)
- Reported within 24 h
- Latest wave
- Wave 25: 1 Feb 2027
What Is ZATCA Phase 2?
ZATCA Phase 2, the integration phase, connects your invoicing system to ZATCA's Fatoora platform. Every invoice is generated as UBL 2.1 XML, given a unique ID and a hash that chains it to the previous invoice, signed with a cryptographic stamp, and either cleared by ZATCA before it reaches the buyer (standard B2B invoices) or reported to ZATCA within 24 hours (simplified B2C invoices).
Phase 1, the generation phase, has applied to all VAT-registered businesses since 4 December 2021: invoices must be electronic and carry a QR code. Phase 2 is rolled out in waves by revenue.
Which ZATCA Wave Applies to You?
ZATCA selects taxpayers for each wave by VAT-subject revenue and notifies them directly at least six months before the integration deadline.
| Date | Who | What changes |
|---|---|---|
| 4 Dec 2021 | All VAT-registered businesses | Phase 1: electronic invoices with QR code, no paper or handwritten invoices. |
| 31 Mar 2026 | Wave 23: revenue above SAR 750,000 | Integration with Fatoora due. |
| 30 Jun 2026 | Wave 24: revenue above SAR 375,000 | Integration with Fatoora due. |
| 1 Feb 2027 | Wave 25: revenue above SAR 187,500 (2022-2025) | Integration with Fatoora due. |
Status as of 9 November 2026. Authorities change dates and thresholds; check the official sources before you plan.
What Do You Need for ZATCA Phase 2?
- A compliance CSID and then a production CSID (cryptographic stamp identifier) for each invoicing unit, obtained through the Fatoora portal with an OTP.
- Invoices as UBL 2.1 XML with a UUID, invoice counter and previous-invoice hash.
- A cryptographic stamp on every invoice and a QR code on the printed invoice.
- Clearance of standard (B2B) invoices before issue and reporting of simplified (B2C) invoices within 24 hours.
- Correct VAT numbers, buyer addresses and VAT categories in your master data.
ZATCA Phase 1 vs Phase 2
| Phase 1 (generation) | Phase 2 (integration) | |
|---|---|---|
| Since | 4 December 2021, all VAT payers | In waves by revenue, 2023 onwards |
| Invoice | Electronic, with QR code | Signed UBL 2.1 XML with hash chain and QR code |
| Connection to ZATCA | None | Fatoora APIs: clearance (B2B), reporting (B2C) |
| Device onboarding | Not needed | CSID per invoicing unit |
Is ERPNext ZATCA Phase 2 Compliant?
Yes, with the open-source zatca_erpgulf app (MIT licence, ERPNext 13-15). We check version support for your setup, including ERPNext 16, before rollout.
- CSR generation, compliance checks and onboarding with ZATCA.
- Signed UBL XML for standard and simplified invoices, credit notes and debit notes.
- Clearance for B2B invoices and reporting for B2C invoices through the ZATCA APIs.
- QR code on the printed invoice, taken from the ZATCA response.
- Multi-company setups and stored XML for audit.
Point-of-sale and offline branches need extra design (queued reporting within 24 hours). We plan those per branch before go-live.
How Do We Implement ZATCA Phase 2 in ERPNext?
- 1Gap checkWe review your ERPNext version, invoice types, customers and current tax setup against the rules that apply to you, and list what must change before the deadline.
- 2SetupInstall and configure the ZATCA app, generate CSRs and onboard each company and device in the ZATCA simulation and production portals.
- 3Master dataTax IDs, VAT categories, item tax templates, addresses and customer identifiers cleaned so every invoice validates first time.
- 4TestRun ZATCA compliance checks for every invoice type, then test clearance and reporting in simulation before switching to production.
- 5Go-live and supportCut-over, user training and monitoring of rejected or failed documents, with support after go-live.
Why Work With FinByz
- Certified ERPNext and Frappe partner with 50+ in-house consultants and developers.
- 200+ projects for clients in 15+ countries since 2016.
- We set up, test and support the open-source compliance apps, and build the connectors that are missing.
- Monthly engagement: size the team to your deadline and scale down after go-live.