Saudi Arabia halves e-invoicing threshold to SAR 187,500 in Wave 25 rollout
ZATCA cut the e-invoicing threshold in half to SAR 187,500 for Wave 25, effective 1 February 2027. Tens of thousands of small businesses must now integrate with Fatoora by that date.
Saudi Arabia’s tax authority ZATCA announced Wave 25 of its e-invoicing mandate on 24 July 2026, cutting the annual revenue threshold from SAR 375,000 to SAR 187,500. The change brings tens of thousands of small cafés, boutiques, freelancers, and service providers into the clearance model for the first time, with an integration deadline of 1 February 2027.
ZATCA announced Wave 25 of Phase 2 e-invoicing on 24 July 2026, cutting the annual revenue threshold in half. Businesses whose VAT-subject revenue exceeded SAR 187,500 in any single year from 2022 through 2025 must now comply, regardless of current turnover.
This threshold is the lowest yet in the Fatoora programme. It brings tens of thousands of small cafés, boutiques, freelancers, and service providers into the clearance model for the first time.
Integration deadline and enforcement
Affected taxpayers must integrate their e-invoicing systems with Fatoora by 1 February 2027. ZATCA will notify targeted businesses at least six months before their integration date, consistent with prior waves.
Wave 25 follows immediately after Wave 24, which had a deadline of 30 June 2026. Full enforcement, including penalties of SAR 5,000 to SAR 50,000, is already in effect since 1 July 2026.
Technical requirements remain demanding
Phase 2 integration goes well beyond Phase 1’s generate-and-store obligation. In-scope businesses must:
- Issue invoices in approved UBL 2.1 XML format
- Apply cryptographic stamps and digital signatures
- Generate a UUID for each invoice
- Embed QR codes
- Connect via secure API for real-time clearance of B2B invoices
- Report B2C simplified invoices within 24 hours
With over 1.7 million active commercial registrations in the Kingdom, Wave 25 is set to be the broadest compliance push in Fatoora’s history. Small businesses with limited IT resources face the steepest challenge in meeting these technical demands by February 2027.