VAT & ZATCA E-Invoicing in Saudi Arabia

VAT basics in Saudi Arabia

Value Added Tax in Saudi Arabia is charged at a standard rate of 15% (raised from 5% in July 2020), with some supplies zero-rated (such as exports and qualifying medicines) or exempt (such as certain financial services and residential rental). VAT is administered by the Zakat, Tax and Customs Authority (ZATCA).

Registration is mandatory once annual taxable turnover exceeds SAR 375,000, and voluntary from SAR 187,500. VAT-registered businesses file returns through the ZATCA portal — monthly for larger taxpayers and quarterly for smaller ones.

FATOORAH e-invoicing: Phase 1 and Phase 2

Saudi Arabia runs the most mature real-time e-invoicing regime in the GCC, called FATOORAH. Phase 1 (Generation) has required structured electronic invoices since December 2021. Phase 2 (Integration) connects your invoicing system directly to ZATCA and is being rolled out in waves, each capturing progressively smaller businesses by revenue.

Under Phase 2, standard (B2B) invoices are cleared with ZATCA in near real time, while simplified (B2C) invoices are reported shortly after issue. Invoices carry a cryptographic stamp, a UUID, a hash and a QR code, and are exchanged as structured XML.

What your invoice must show

• Seller name, address and 15-digit VAT registration number
• Buyer details (and VAT number if registered)
• A unique, sequential invoice number and the issue date
• Description, quantity and unit price per line
• The taxable amount, VAT rate and VAT amount per line and in total
• The total payable including VAT, and a QR code (Phase 2)

How Tallium helps

Tallium applies 15% VAT on every sale and expense, builds a VAT-return-ready summary for the ZATCA portal, and is designed to work with FATOORAH e-invoicing requirements such as QR codes and structured invoice data. Check whether your business is in a current Phase 2 wave, and confirm the details with ZATCA or a qualified tax professional.