ZATCA Phase 2 for a small business: what it is and how TAQNIX ERP helps

Phase 1 is called the generation phase. Your invoices must be made in an electronic, structured form, they must show the required fields, and they must carry a QR code with a few values: the seller name, the VAT number, the date and time, the total and the VAT amount. You keep the invoices. You do not send them to ZATCA.

Phase 2 is called the integration phase. Your system now talks to ZATCA. Each invoice carries a cryptographic stamp, a unique number and a link to the previous invoice, and it goes to ZATCA through an official interface. Simplified invoices (the ones for consumers, like a shop receipt) are reported to ZATCA within 24 hours. Standard invoices (the ones for other businesses) are sent first and cleared by ZATCA before you give them to the buyer.

• Phase 1: make the invoice in the right form with a QR code, keep it.
• Phase 2: stamp the invoice and send it to ZATCA: report simplified invoices, clear standard invoices.

ZATCA does not switch everyone to Phase 2 on the same day. Businesses are called in groups, called waves. A wave is defined by the revenue a business had in a stated earlier year, and ZATCA tells the businesses it selects and gives them a date.

The criteria and dates change when ZATCA publishes a new wave, so we do not repeat them here. Look at our Phase 2 waves page, which we update, or type your yearly revenue into the free wave checker. Both are information, not a notice from ZATCA: the notice you receive from ZATCA is what counts.

Right after you install it, every tax invoice and every receipt carries the Phase 1 QR code. There is nothing to switch on. You can print the invoice on A4 paper or the receipt on an 80 mm receipt printer.

Phase 2 e-invoicing integration is built in and optional; try it in ZATCA’s test environment first; you switch it on yourself. We tested it against ZATCA’s test environment (the sandbox): simplified invoices were reported and standard invoices were cleared there.

That is a test result, not a statement about production. We do not say that ZATCA has reviewed or given a seal to the program, and we have not published any proof of live submissions. Please run your own test invoices with your own data before you rely on it.

The setup screen is where you prepare the connection, and the status screen shows what happened to each invoice.

You do not need to hurry. When your wave is announced, work through these steps in order:

• Keep issuing invoices with the Phase 1 QR code as you do today.
• Open the ZATCA setup screen and read it through. Choose the test environment.
• Issue a few test invoices: a simplified one and a standard one. Look at the status screen for each.
• Ask your accountant to look at the results.
• Only then switch to production, on the date that suits you and is allowed for your wave.

The keys that stamp your invoices are created on your Mac. At the end of the first setup the program asks you to save a copy of the keys file. Put it on a USB stick or in your password manager, not only on the same Mac. If the Mac is lost and you have no copy, the keys cannot be recovered.

The program works without internet, so you can learn it at your own pace. The free trial lasts 6 months from the day you set up your company. If you want the full picture of the rules, read our compliance overview and the install guide.