ZATCA Phase 2: what Saudi businesses need to know
ZATCA Phase 2, officially called the Integration phase, moves Saudi e-invoicing from a QR code printed on a PDF to a live connection with ZATCA's servers. If Phase 1 was about generating a compliant invoice, Phase 2 is about proving that invoice to the government in real time. Here's what actually changes, how the rollout works, and what to check before your business is affected.
Phase 1 vs. Phase 2: what actually changed
Phase 1, in force since December 2021, requires every tax invoice to be generated electronically, carry a QR code, and include specific structured fields — no more handwritten or scanned paper invoices. Phase 2 builds on top of that. Invoices must now be generated in a structured XML format (UBL 2.1), carry a cryptographic stamp and a unique hash linking each invoice to the one before it, and get transmitted to ZATCA's Fatoora platform through an API integration, not just printed with a code.
How the wave rollout works
ZATCA doesn't flip Phase 2 on for every business at once. Taxpayers are grouped into waves, generally by annual revenue, with the largest businesses onboarded first and smaller ones following in later waves. Each wave gets an official notification from ZATCA months ahead of its integration deadline, specifying the exact date the business needs to be connected by. If you haven't received a notification yet, that doesn't mean you're exempt forever — it means your wave hasn't been announced.
Clearance vs. reporting: two different invoice paths
Standard tax invoices (typically B2B) go through clearance — they're submitted to ZATCA and approved before the invoice is considered valid and sent to the customer. Simplified invoices (typically B2C, like retail receipts) go through reporting instead — they're issued to the customer immediately and reported to ZATCA within 24 hours. The technical requirements — XML structure, cryptographic stamp, hash chaining — apply to both, but the timing and approval flow differ.
What to check before your Phase 2 deadline
A few things are worth confirming early rather than at the last minute: whether your current invoicing software (or accounting software) has a Phase 2 integration roadmap, whether your invoice numbering and data already match ZATCA's structured-field requirements, and whether someone on your team owns this as a task instead of assuming it's handled. Waiting until your wave notification arrives to start asking these questions leaves very little runway.
Where Booksara stands today
To be direct about where things stand: Booksara is fully compliant with ZATCA Phase 1 today, covering the QR-code and structured-invoice requirements already in force. Our Phase 2 integration — the XML generation, cryptographic stamping, and real-time submission described above — is in active development and is not yet available for customer use. If your business has received a Phase 2 wave notification from ZATCA with a near-term deadline, contact support@booksara.com so we can give you an accurate, current answer rather than a general estimate, and keep an eye on our ZATCA e-invoicing page for the latest status.
Frequently Asked Questions
What is ZATCA Phase 2?
Phase 2, the Integration phase, requires businesses to generate invoices as structured XML, add a cryptographic stamp and hash, and transmit them to ZATCA's Fatoora platform through an API, either for clearance or reporting depending on invoice type.
When does Phase 2 apply to my business?
ZATCA rolls Phase 2 out in waves based mainly on annual revenue, and notifies each wave directly with a specific integration deadline. There's no single date that applies to every business — check for a wave notification from ZATCA or confirm your status with them directly.
What's the difference between clearance and reporting?
Clearance applies to standard (typically B2B) invoices, which need ZATCA approval before being sent to the customer. Reporting applies to simplified (typically B2C) invoices, which are issued immediately and reported to ZATCA within 24 hours.
Do I need new software for Phase 2?
You need software capable of generating UBL 2.1 XML, applying a cryptographic stamp, and connecting to ZATCA's API — not every Phase 1-compliant tool has this built yet, so it's worth confirming directly with your provider rather than assuming.
Is Booksara ready for ZATCA Phase 2?
Not yet. Booksara currently covers Phase 1 in full, and Phase 2 integration is in active development. Businesses with a near-term wave deadline should contact support directly for a current, honest status update.
Phase 1 compliance is table stakes at this point, not a differentiator. See how Booksara handles ZATCA compliance today, and reach out if Phase 2 timing matters for your business specifically.