Fatoora Phase 2, explained plainly

Every tax invoice you issue falls into one of two families, and Phase 2 treats them differently. A standard tax invoice — issued to another VAT-registered business, which is most contractor, developer and facilities work — must be cleared by Fatoora before it is issued: your solution sends the invoice XML, ZATCA's platform stamps it, and only the cleared document goes to your customer.

A simplified tax invoice — issued to a household or a consumer, which is most call-out and villa work — is not cleared in advance. Instead it must be reported to ZATCA within 24 hours of issue, and it carries a QR code the customer can scan to verify it. One connection to Fatoora carries both flows; which rule applies is decided by the buyer, never by the job.

This is why cleared documents are never edited. A mistake is corrected with a credit or debit note that references the original — the chain keeps both, and your customer's accountant sees a clean trail instead of a quietly changed number.

• UBL 2.1 XML — the structured format both rules run on; the PDF or printout is a view of it, not the invoice itself.
• A UUID — a unique identifier minted for that document alone.
• The cryptographic stamp (CSID) of your firm's onboarded solution, applied at clearance or reporting.
• A hash of the previous invoice — documents form a chain, so a missing or altered invoice breaks the sequence visibly.

Waves descend by revenue. Wave 24 — above SAR 375,000 in any of 2022–2024 — integrated by 30 June 2026. Wave 25 — above SAR 187,500 in any of 2022–2025, announced 24 July 2026 — integrates by 1 February 2027, and it is the first wave aimed squarely at micro and small firms: SAR 187,500 a year is only about SAR 15,600 a month. ZATCA's roll-out table closes with “additional waves to be announced”, so firms below today's lines should expect a wave of their own rather than an exemption forever.

One date sits next to the deadline like a warning light: ZATCA's fines-and-penalties waiver runs to 31 December 2026. Relief ends a month before Wave 25 integrates — January 2027 is when unprepared firms feel both at once.

Phase 2 readiness ends in a software decision: what your invoicing tool must prove — real UBL XML, managed CSID onboarding, both clearance and reporting — is listed in the software-choosing guide.