# ZATCA 2026: The Complete E-Invoicing Guide for Businesses *Everything a business owner needs to know about e-invoicing* > **In short:** A complete ZATCA guide for 2026: the e-invoicing phases, compliance requirements, fines, and how to get your business ready without the complexity. - **URL:** https://www.snad.io/en/blog/dalil-zatca-2026 - **Arabic original:** https://www.snad.io/blog/dalil-zatca-2026 - **Category:** Explainers — ZATCA & Tax - **Tags:** ZATCA, e-invoicing, Value Added Tax, VAT, tax compliance - **Published:** 2025-10-04 - **Updated:** 2026-08-02 - **Publisher:** Snad (snad.io) The Zakat, Tax and Customs Authority (ZATCA) has become one of the bodies you hear about most as a business owner. Some people hear the name and worry. Others ignore it and hope it passes them by. Many simply have no idea where to start. This guide is written for you — the business owner who wants the full picture, without the dense legal language. ## What is ZATCA, and why does it matter to you? ZATCA is short for the Zakat, Tax and Customs Authority — the authority responsible for zakat, tax and customs in the Kingdom of Saudi Arabia. It is the government body in charge of: - Collecting Value Added Tax (VAT 15%) - Collecting Zakat from companies - Overseeing customs, imports and exports - Enforcing the e-invoicing system Why does it matter to you directly? Because any company whose annual revenue exceeds SAR 375,000 must register for VAT and issue electronic invoices that meet ZATCA's requirements. Fail to do that and you face fines that can start at SAR 1,000 per violation. ## What exactly is an electronic invoice? An electronic invoice is not simply a PDF you send by email. That is a very common misunderstanding. A ZATCA-compliant electronic invoice is: - An invoice generated electronically by an approved system - In XML or PDF/A-3 format - Carrying an encrypted QR code - Linked to an accounting system that supports ZATCA's standards - In Phase Two: sent to the ZATCA platform for clearance before it goes to the customer What an electronic invoice is not: - A Word or Excel invoice saved as a PDF - A printed invoice that has been photographed - A traditional POS receipt with no electronic integration - A WhatsApp message stating the amount ## Phase One and Phase Two — where are you now? ZATCA rolled out the e-invoicing system in two phases: Phase One — generation (started December 2021): - Mandatory for every VAT-registered company - The invoice is generated electronically and carries a QR code - No live integration with ZATCA - The goal: stop issuing manual paper invoices Phase Two — integration (phased rollout from 2023): - A direct link between your invoicing system and the ZATCA platform - The invoice is sent to ZATCA for clearance and stamping before it goes to the customer - Applied in waves by revenue size, from the largest companies down - In 2026 it covers a wider band of small and medium-sized companies How do you find out your date? ZATCA sends an official notice to your registered email address at least 6 months in advance. ## Requirements for a compliant electronic invoice The mandatory data on every invoice: - The seller's name and commercial registration (CR) number - The VAT registration number - The date and time the invoice was issued - The sequential invoice number - The buyer's details for B2B invoices - The details of every good or service - The VAT rate, which is 15%, and the VAT amount - The total including tax - An encrypted QR code Invoice types: - Simplified invoice (B2C): for sales to individuals, such as a restaurant or shop receipt - Full tax invoice (B2B): for sales between companies, which requires the buyer's full details A warning: an invoice missing any of these fields can expose you to a fine, however neatly it is printed. ## Fines and penalties Do not take this lightly. ZATCA fines for non-compliance: - Failing to issue a tax invoice: a fine starting at SAR 1,000 per invoice - Issuing an invoice that does not meet the requirements: a fine of up to SAR 10,000 - Failing to integrate with the ZATCA platform in Phase Two: penalties that can extend to temporary suspension of the business - Tax evasion: a fine of up to 3 times the amount of tax evaded The good news: ZATCA offers routes for voluntary settlement and for correcting errors before the full penalties are applied. Even so, the better outcome is never to reach that point at all. ## How do you get your business ready for ZATCA? The practical steps, one by one: 1. Check that you are registered for VAT Revenue above SAR 375,000 a year = registration is mandatory. Between SAR 187,500 and SAR 375,000 = registration is optional and recommended. 2. Choose an accounting system that is ZATCA-compliant Not every package supports ZATCA properly. Make sure the system covers the Phase Two requirements, not just Phase One. 3. Train your team to issue invoices correctly A wrong invoice has consequences. Set aside an hour to train whoever handles invoicing. 4. Keep an archive of your invoices Invoices must be retained for at least 6 years. A cloud system does this automatically. 5. Watch for ZATCA's notices Subscribe to its electronic services. Updates sometimes arrive with no advance warning. Snad is 100% ZATCA-compliant and issues valid electronic invoices with a QR code and every mandatory field filled in automatically. ## Frequently asked questions ### Is every company required to issue electronic invoices? Every VAT-registered company is covered by Phase One. Phase Two is being applied in waves, based on revenue size. ### Is a PDF enough to be compliant? No. A PDF on its own is not enough in Phase Two — the invoice must be generated electronically in the approved formats and carry an encrypted QR code. ### What is the VAT registration threshold? Registration is mandatory once revenue exceeds SAR 375,000 a year. It is optional for revenue between SAR 187,500 and SAR 375,000. ### How do I know whether I am in Phase Two? You receive an official notice from ZATCA 6 months before your onboarding date. You can also check through the ZATCA e-portal. --- ## About the publisher **Snad (سند)** — a private Saudi software company based in Riyadh, founded 2025. Legal form: Sole proprietorship. Commercial registration: 7038154642 VAT number: 310959226500003 Only official domain: snad.io > Snad is a private commercial business-management platform. It is not a > government body, not a bank, and not a government services portal, and it > is not affiliated with any government entity. Any site or app with a > similar name is unrelated to Snad.