Phase 1 vs Phase 2: what actually changes
Phase 1 made your invoices electronic. Phase 2 makes them provable — signed XML documents that ZATCA's systems check, not just PDFs with a QR printed on.
Two phases, one direction
Saudi Arabia's e-invoicing mandate arrived in two steps. Phase 1 — Generation (in force since December 2021) ended handwritten and purely paper invoices: businesses had to issue invoices from an electronic system, with a QR code on simplified invoices. The invoice, however, stayed inside your own system.
Phase 2 — Integration (rolling out in waves since January 2023) is the bigger shift: your invoicing system connects to ZATCA's Fatoora platform, and the invoice itself becomes a structured, cryptographically signed document that ZATCA can validate.
Phase 1 · Generation
- Invoices issued electronically
- QR code on simplified invoices (tags 1–5)
- Invoice lives in your system only
- No connection to ZATCA
Phase 2 · Integration
- Structured UBL 2.1 XML invoices
- XAdES digital signatures
- QR gains cryptographic tags (6–9)
- Clearance: standard (B2B) invoices validated by ZATCA before sharing
- Reporting: simplified (B2C) invoices reported within 24 hours
- Your EGS (e-invoice generation solution) onboarded with ZATCA
The part that surprises teams
Phase 2 is not a formatting change — it's a cryptography and integration project. The invoice must be generated as compliant XML, validated against ZATCA's business rules (BR-KSA), signed correctly, and submitted through the right channel for its type. Each of those steps has failure modes that produce rejections, and the rejection codes are famously terse.
That's the gap Signet is built for: a bridge that sits beneath the ERP or POS you already run — validating before submission, signing, and handling clearance and reporting — rather than asking you to replace your system.
Where to start
Two free steps, before any commitment: decode a real invoice QR from your current system to see whether it carries Phase-2 material, and check which integration wave covers your business (waves are announced by VAT-liable revenue thresholds). Then plan the integration against your wave's deadline — not the week it arrives.
Is your invoice Phase-1 or Phase-2? Find out in seconds
Paste any Fatoora QR into the free decoder — it flags Phase-1 vs Phase-2 and explains every tag. No signup, nothing stored.
Open the free QR decoder →Common questions
What was Phase 1?
The Generation phase (since December 2021): invoices issued electronically, QR on simplified invoices, no ZATCA connection.
What does Phase 2 add?
Integration with ZATCA's Fatoora platform: UBL 2.1 XML, XAdES signatures, clearance for standard invoices, 24-hour reporting for simplified ones, EGS onboarding.
What are clearance and reporting?
Clearance: ZATCA validates a standard (B2B) invoice before you share it. Reporting: simplified (B2C) invoices are issued at sale and reported within 24 hours.
Regulatory context based on the ZATCA e-invoicing framework — not tax advice. Waves, thresholds and dates are set by ZATCA; always confirm your own obligations with ZATCA or your tax advisor.