ZATCA approval of invoicing software: what it means and what to check

If you are searching for ZATCA approval of invoicing software, here is the direct answer: a vendor’s claim of approval is something to verify rather than take on trust. ZATCA publishes a Solution Providers Directory, an indicative list of providers that passed its qualification process, and says plainly that the list is not an approval of their solutions. Under Phase 2, the check that matters is the compliance onboarding each taxpayer completes for its own system on the Fatoora portal.

The directory marks each provider as qualified for Phase 1, Phase 2 or both, and a Phase 2 provider has also met the Phase 1 criteria. ZATCA calls the list a guide that is not legally binding on taxpayers, and a provider can apply to be added. It treats any taxpayer that meets the requirements as compliant even when its provider is not listed. So 'approved' on a vendor's website is a claim to verify, not proof.

Most owners really want to know whether the software will cause trouble with the Zakat, Tax and Customs Authority. The honest way to settle it is to see for yourself what the software produces and what happens when it connects to ZATCA, which you can check in the simulation environment.

Phase 1, the generation phase, applies from 4 December 2021. Invoices are issued and stored electronically in a structured form, handwritten invoices are out, and simplified invoices carry a QR code with the seller name, VAT registration number, timestamp, invoice total with VAT and the VAT amount. No connection to ZATCA's systems is needed.

Phase 2, the integration phase, applies from 1 January 2023 and connects the system to the Fatoora platform. Each invoice carries XML in UBL 2.1, a cryptographic stamp, a QR code, a unique invoice identifier (UUID), a counter value and the hash of the previous invoice, which chains invoices together. Standard tax invoices are cleared before the buyer receives them; simplified ones are issued at once and reported within 24 hours.

Phase 2 reaches taxpayers in numbered waves chosen by VAT revenue, and ZATCA has announced 25 so far. It notifies each wave directly at least six months before its integration date. For wave 25, ZATCA set a deadline no later than 1 February 2027 and selected taxpayers whose VAT revenue passed SAR 187,500 in 2022, 2023, 2024 or 2025. Check your own wave with ZATCA.

Under Phase 2, each taxpayer onboards its own system on the Fatoora portal. The steps belong to the business that issues the invoices, not to the vendor, and the resulting certificates are issued to your business. The software prepares the technical request and the test invoices, but the process always starts from your own Fatoora account. That is why the key question for any vendor is: what does the software do, and what do you do?

Note who completed the onboarding and when, and keep the login details with someone the business can always reach. If a vendor or a colleague does the work for you, it should go through your account, and you should be told what was done. A business with several tills or branches should ask the vendor how each is registered. The five steps, in order, are below.

• Get a one-time password (OTP) from your Fatoora account
• Generate a certificate signing request (CSR)
• Receive a compliance CSID
• Pass the compliance checks with sample invoices
• Receive a production CSID and begin issuing live invoices

Start by looking the vendor up in ZATCA's Solution Providers Directory and reading ZATCA's own note about what the list means. Then still ask for evidence, not adjectives: words such as compliant, ready and integrated are easy to write on a website, while a working demonstration is hard to fake. Put your questions in writing, ask for written answers and keep them with your onboarding notes, because a small business has no time to discover problems after it has subscribed.

Good evidence looks like this: a sample invoice in XML showing the cryptographic stamp, counter value and previous-invoice hash; a demonstration in the simulation environment, with a standard invoice cleared and a simplified one reported; written onboarding steps; and a plain answer on how updates follow ZATCA's changes and whether they are included.

• Is the vendor in ZATCA's Solution Providers Directory, and have I read ZATCA's note?
• Does it support Phase 2 integration today?
• Are invoices XML in UBL 2.1, with stamp, counter and previous-invoice hash?
• Does it clear standard invoices and report simplified ones?
• Can I test in the simulation environment before paying?
• Who handles onboarding, and how are updates delivered?

Be careful with any promise of a certificate or approval offered as a substitute for onboarding. A vendor that says it is approved or certified and cannot point to anything on ZATCA's website is making a claim with nothing behind it. If a logo or badge appears, ask what exactly it refers to. Be equally wary of a vendor that never mentions onboarding.

Two more warnings. One is software you cannot try before paying, since you find problems only after the money is spent. The other is a fixed price sold as compliance forever, because ZATCA's requirements change from time to time and nobody knows what will change next. Ask who will update the software, and when; if the answers are vague, look for another vendor.

Fatooraz is cloud software that you use from a browser. It supports ZATCA's e-invoicing requirements for Phase 1 and Phase 2: tax invoices, simplified invoices and credit notes, each with a QR code and sequential numbering. Fatooraz makes no claim of ZATCA approval or certification, nor does it imply that it can stand in for onboarding: using it does not replace the onboarding your business completes.

Onboarding on the Fatoora portal is done by you, the taxpayer, and Fatooraz guides you through it. You sign up on your own with an email address, choose your web address and get a private workspace and a free trial, with no credit card needed. The trial runs in ZATCA's simulation environment. The Starter plan covers invoicing, VAT and ZATCA e-invoicing; the Business plan adds the point of sale.