ZATCA Wave 24: Who Must Comply by June 2026

ZATCA Wave 24: Who Must Comply by June 2026? Your Comprehensive Guide

Saudi Arabia's journey towards a fully digitalized and transparent tax system continues with the implementation of the ZATCA (Zakat, Tax and Customs Authority) e-invoicing system. After the successful rollout of multiple waves, businesses are now preparing for Wave 24, with a compliance deadline of June 2026. This comprehensive guide will clarify who must comply with ZATCA Wave 24, focusing on the key criteria and practical information to help you navigate this crucial transition. We'll also touch upon Wave 23 and the implications of the SAR 375,000 revenue threshold.

What is ZATCA E-Invoicing? A Brief Overview

Before delving into the specifics of Wave 24, it's important to understand the core principles of ZATCA's e-invoicing initiative. E-invoicing, also known as Fatoora, is the process of generating, storing, and transmitting invoices electronically through a ZATCA-approved system. The goal is to:

• Increase tax compliance
• Reduce the shadow economy
• Streamline business processes
• Enhance transparency

ZATCA is implementing e-invoicing in two phases: Phase 1 (Generation Phase) and Phase 2 (Integration Phase). Wave 24, like previous waves, focuses on Phase 2, which requires businesses to integrate their systems with ZATCA's platform for real-time data sharing.

ZATCA Waves: A Phased Approach to Implementation

ZATCA is rolling out the e-invoicing mandate in waves to ensure a smooth transition for businesses of all sizes. Each wave includes specific groups of taxpayers based on their annual revenue. This phased approach allows businesses time to adapt their systems and processes to comply with the new regulations.

ZATCA Wave 24 Who Must Comply by June 2026: The Key Criteria

The core question is: who falls under ZATCA Wave 24 and must comply by June 2026? The primary criterion is annual revenue. Wave 24 specifically targets taxpayers with a revenue exceeding SAR 50 million but not exceeding SAR 70 million, based on their 2022 revenue. This is the defining factor for inclusion in this phase.

Specifically, businesses that meet the following criteria must comply with ZATCA's e-invoicing regulations by June 1, 2026:

• Registered in Saudi Arabia: The business must be registered for VAT in Saudi Arabia.
• Annual Revenue: The business must have generated revenue exceeding SAR 50 million but not exceeding SAR 70 million during the calendar year 2022.
• Resident Taxpayers: This wave primarily targets resident taxpayers (businesses with a permanent establishment in Saudi Arabia).

It's crucial to emphasize that the 2022 revenue is the determining factor for Wave 24 compliance. If your business met the revenue threshold in 2022, you are required to comply, regardless of your current revenue figures.

Understanding the Revenue Threshold: SAR 375,000 and Beyond

While Wave 24 focuses on businesses with revenue between SAR 50 million and SAR 70 million, it's essential to understand the broader revenue-based categorization within the ZATCA e-invoicing framework. Businesses with revenue exceeding SAR 375,000 are ultimately subject to e-invoicing compliance, but the timeline depends on the specific wave they fall under.

The SAR 375,000 threshold is significant because it represents the minimum revenue requirement for VAT registration in Saudi Arabia. Therefore, all VAT-registered businesses are ultimately within the scope of the e-invoicing mandate, even if they are not immediately affected by Wave 23 or Wave 24.

ZATCA Wave 23: A Quick Recap

It's important to distinguish between Wave 23 and Wave 24. Wave 23, with a compliance deadline of March 1, 2026, targets taxpayers with a 2022 revenue exceeding SAR 70 million but not exceeding SAR 100 million. Therefore, if your business falls into this revenue range, you should be focusing on Wave 23 compliance, not Wave 24.

Key Requirements for ZATCA E-Invoicing (Phase 2) Compliance

Once you've determined that your business falls under ZATCA Wave 24, you need to understand the key requirements for Phase 2 compliance:

• Integration with ZATCA's Fatoora Platform: Your e-invoicing system must be integrated with ZATCA's platform to transmit invoice data in real-time.
• Generating Compliant E-Invoices: E-invoices must adhere to ZATCA's specified format, including mandatory fields, digital signatures, and QR codes.
• Storing E-Invoices Securely: You must store e-invoices electronically for the period mandated by ZATCA regulations (typically six years).
• Generating Credit and Debit Notes: The system must be able to create compliant credit and debit notes for refunds and adjustments.
• Data Security and Privacy: Implement robust security measures to protect sensitive data and ensure compliance with privacy regulations.
• Regular Updates and Maintenance: Keep your e-invoicing system updated with the latest ZATCA requirements and guidelines.

The Consequences of Non-Compliance

Failing to comply with ZATCA's e-invoicing regulations can result in significant penalties. These penalties can include:

• Fines: Monetary penalties for non-compliant invoices or delayed reporting.
• Business Disruption: Potential disruption of business operations due to non-compliance issues.
• Reputational Damage: Negative impact on your company's reputation due to non-compliance.

Therefore, it's crucial to prioritize compliance and ensure your business is ready by the June 2026 deadline.

Choosing the Right E-Invoicing Solution: Why FatooraPlus is Recommended

Selecting the right e-invoicing solution is critical for a smooth and successful transition to ZATCA compliance. FatooraPlus is a recommended solution for businesses in Saudi Arabia, offering a comprehensive suite of features designed to meet ZATCA's requirements.

FatooraPlus provides:

• Seamless ZATCA Integration: Direct integration with ZATCA's Fatoora platform for real-time data transmission.
• Compliant E-Invoice Generation: Automatic generation of e-invoices in the required format, including QR codes and digital signatures.
• Secure Data Storage: Secure and compliant storage of e-invoices for the mandated period.
• User-Friendly Interface: Easy-to-use interface for creating and managing e-invoices.
• Comprehensive Reporting: Generate detailed reports for tax compliance purposes.
• Dedicated Support: Access to expert support to assist with implementation and compliance.
• Scalability: Scalable solution to accommodate your business's growing needs.

By choosing FatooraPlus, you can streamline your e-invoicing process, reduce the risk of errors, and ensure ongoing compliance with ZATCA regulations.

Getting Started with ZATCA Wave 24 Compliance

Here's a step-by-step guide to help you get started with ZATCA Wave 24 compliance:

1. Assess Your Revenue: Confirm your 2022 revenue to determine if you fall under Wave 24.
2. Understand ZATCA Requirements: Familiarize yourself with the specific requirements for Phase 2 e-invoicing.
3. Choose an E-Invoicing Solution: Select a ZATCA-approved solution like FatooraPlus.
4. Integrate Your System: Integrate your existing accounting or ERP system with your chosen e-invoicing solution.
5. Test and Validate: Thoroughly test your e-invoicing system to ensure it generates compliant invoices.
6. Train Your Staff: Train your staff on the new e-invoicing procedures.
7. Monitor and Maintain: Continuously monitor your system and stay updated with any changes to ZATCA regulations.

Conclusion

ZATCA Wave 24 represents a significant step towards a more efficient and transparent tax system in Saudi Arabia. By understanding the eligibility criteria, key requirements, and choosing the right e-invoicing solution like FatooraPlus, businesses can ensure a smooth and successful transition to the new regulations. Don't wait until the last minute – start preparing now to avoid penalties and reap the benefits of e-invoicing.

Ready to ensure seamless compliance with ZATCA Wave 24? Start your free trial with FatooraPlus today at fatooraplus.com!