E-Invoicing in Saudi Arabia (FATOORAH/ZATCA, 2026) How Saudi Arabia's e-invoicing system works in 2026

Q: Can I issue PDF invoices?

A PDF rendering of the e-invoice can accompany the structured XML, but PDF alone does not satisfy FATOORAH. The structured electronic invoice with ZATCA's cryptographic stamp is the legal document.

E invoicing
01 May, 2026
6 min read

TL;DR: Saudi Arabia operates FATOORAH, a national e-invoicing system run by ZATCA (the Zakat, Tax and Customs Authority). It uses real-time clearance — every B2B invoice must be cleared by ZATCA’s platform before reaching the buyer — rather than the post-audit Peppol model used in most of Europe. Phase 1 (generation/storage) has been mandatory since December 2021; Phase 2 (integration with ZATCA in real-time) is rolling out in waves through 2024-2026.

If you’re invoicing into or out of Saudi Arabia, the model is fundamentally different from the European Peppol approach. Here’s what changes for your operations.

How FATOORAH works

FATOORAH is Saudi Arabia’s national e-invoicing system. It mandates that all VAT-registered businesses in the Kingdom issue invoices electronically through ZATCA-approved tools, and — in Phase 2 — submit invoices to ZATCA in real-time for clearance.

The model has two phases:

Phase 1: Generation — mandatory since December 4, 2021

All taxable persons (businesses and self-employed) must:

Generate invoices electronically using a compliant e-invoicing solution
Include specific mandatory fields: VAT number, invoice number, QR code (for B2C), tax breakdown
Store invoices electronically in a tamper-evident way
No paper-only or PDF-only invoicing for taxable transactions

Phase 1 doesn’t yet require real-time submission to ZATCA — businesses generate and archive locally. The platform validation comes in Phase 2.

Phase 2: Integration — phased rollout 2023–2026

Phase 2 requires e-invoicing systems to integrate directly with ZATCA’s platform via API:

B2B invoices are sent to ZATCA in real-time clearance mode — ZATCA validates and returns a cryptographic stamp before the invoice can legally reach the buyer
B2C invoices are sent to ZATCA in reporting mode — within 24 hours of issuance, asynchronously
Each invoice gets a UUID and cryptographic stamp from ZATCA
A QR code on the invoice enables consumer verification

ZATCA rolls out Phase 2 in waves based on annual revenue:

Wave	Annual revenue threshold	Effective date
Wave 1	> SAR 3 billion	January 2023
Wave 2	> SAR 500 million	July 2023
Wave 3	> SAR 250 million	October 2023
Wave 4	> SAR 150 million	November 2023
Wave 5+	Continuing waves	2024-2026

By 2026 most VAT-registered businesses are integrated.

The format

FATOORAH uses a UBL 2.1-based XML format — similar in foundation to Peppol BIS Billing 3.0, but with Saudi-specific extensions:

Mandatory cryptographic stamping
ZATCA-specific identifiers (UUIDs, hashes)
Required Arabic-language fields alongside English
QR code with TLV-encoded summary data
Specific tax categorisation and codes

The XML must validate against ZATCA’s schema. Invoices are signed using the supplier’s certificate before transmission.

What businesses operating in Saudi Arabia need to do

If you’re a Saudi VAT-registered business

By 2026 you should already be Phase 2 compliant. Practically:

Use ZATCA-certified e-invoicing software. Major accounting platforms (Zoho Books, SAP, Oracle, Microsoft Dynamics, local Saudi tools) all have ZATCA-compliant modules.
Confirm cryptographic certificate is renewed. ZATCA certificates expire and need renewal — check with your provider.
Test integration with ZATCA periodically. Outages on either side block invoicing; have escalation paths defined.

If you’re a foreign business invoicing into Saudi Arabia

Foreign suppliers don’t directly participate in FATOORAH — ZATCA enforces only on Saudi VAT-registered taxpayers. But:

Your Saudi customer’s AP team requires invoices that satisfy Saudi tax requirements
A clear breakdown of VAT (15% standard rate), Arabic language for key fields, and structured data are typically expected
For very large contracts, your Saudi customer may require you to bill through a local entity for ZATCA compliance reasons

If you’re a Saudi business with customers in the EU

Your Saudi-issued invoices satisfy ZATCA requirements but won’t be Peppol-compatible by default. EU customers in countries with mandates (Italy, Belgium, Germany) may ask for additional Peppol-format invoices for their own accounting flows. Your accounting software typically supports producing both.

How FATOORAH compares to Peppol

Feature	FATOORAH (Saudi Arabia)	Peppol (EU)
Model	Real-time clearance	Post-audit
Authority	ZATCA (single national authority)	OpenPeppol + national authorities
Format	UBL 2.1 + Saudi extensions	UBL 2.1 (Peppol BIS profile)
Validation	Pre-clearance (B2B)	Schema only
Cross-border	Domestic only	Cross-border by design
Crypto stamping	Required	Not required
B2C	Reporting mode	Out of scope

The FATOORAH model is closer to Italy’s SdI than to Belgium’s Peppol approach.

Frequently asked questions

Is FATOORAH mandatory for all Saudi businesses?

For VAT-registered businesses, yes — Phase 1 is universal since December 2021, and Phase 2 is rolling out in waves based on revenue. Non-VAT-registered persons are not subject to the mandate.

Can I issue PDF invoices?

A PDF rendering of the e-invoice can accompany the structured XML, but PDF alone does not satisfy FATOORAH. The structured electronic invoice with ZATCA’s cryptographic stamp is the legal document.

Does the QR code need to be on every invoice?

For B2C (simplified tax invoices) — yes, the QR code is mandatory and consumers can verify the invoice using ZATCA’s app. For B2B invoices the QR code is included but verification is between systems via the ZATCA-issued UUID.

What format does FATOORAH use exactly?

UBL 2.1 with Saudi extensions. The schema is published by ZATCA and includes specific mandatory fields, code lists and signing requirements. Modern accounting software handles the formatting; you don’t typically work with the raw XML.

Can a Peppol invoice satisfy FATOORAH?

No. While both are based on UBL 2.1, FATOORAH requires Saudi-specific extensions, Arabic-language fields, and cryptographic signing in a specific format that Peppol BIS doesn’t include. A FATOORAH-compliant invoice will pass UBL validation but is structured for the Saudi context.

What happens if ZATCA’s platform is down?

For Phase 2 B2B real-time clearance, an outage blocks invoice issuance. Most accounting tools queue invoices and submit when service resumes. ZATCA has historically provided maintenance windows and post-incident reporting; your accounting tool should handle queueing automatically.

Is FATOORAH expanding to other GCC countries?

UAE, Bahrain, Kuwait, Oman and Qatar have their own e-invoicing initiatives at varying stages. UAE Ministry of Finance announced an e-invoicing programme in 2024 with phased rollout planned. The GCC isn’t unifying onto a single platform like Peppol; each country runs its own system with similar real-time-clearance philosophies.

How do I open a FATOORAH XML invoice as a foreign business?

The underlying format is UBL 2.1, so any UBL-aware viewer can display the basic invoice fields. UBL Buddy opens FATOORAH XML invoices on Mac, iPhone and iPad — though Saudi-specific extensions (cryptographic stamps, Arabic field labels) may render generically rather than with full Arabic UI.