Saudi Arabia's ZATCA Phase 2 moves e-invoicing from a local requirement to a fully integrated, real-time process and Odoo is ready to support it.
What Is ZATCA Phase 2?
ZATCA Phase 2, known as the Integration Phase, is the second stage of Saudi Arabia's electronic invoicing program, which began on 1 January 2023. Where the earlier phase focused on generating structured electronic invoices, Phase 2 requires businesses to integrate their invoicing systems directly with ZATCA's Fatoora platform, enabling real-time or near-real-time exchange of invoice data.
In practical terms, this means your ERP or invoicing software must be able to talk to ZATCA's systems in a compliant, secure way not just produce a compliant document on its own.
A Wave-Based Rollout
ZATCA is not applying Phase 2 to every business at once. Instead, it is rolling out in waves, based on VAT-taxable revenue, with larger taxpayers brought in first and smaller ones following over time. Crucially, ZATCA provides each wave with at least six months' notice before its integration deadline.
That notice window is a gift but only if you use it. Businesses that wait until the deadline approaches often find themselves rushing an integration that deserves careful planning and testing.
Clearance vs. Reporting: B2B and B2C
Phase 2 handles two invoice types differently:
- B2B (business-to-business) Clearance: tax invoices must be sent to ZATCA for clearance before they are shared with the buyer. The invoice is effectively validated by the platform as part of the process.
- B2C (business-to-consumer) Reporting with QR: simplified invoices carry a QR code and are reported to the Fatoora platform, typically within a short window after issuance.
Understanding which of your transactions fall into each category is an important early step in getting compliant.
What Businesses Need to Do
To meet Phase 2 requirements, businesses generally need to:
- Confirm which wave they fall into and their integration deadline.
- Adopt or configure a compliant e-invoicing solution capable of connecting to Fatoora.
- Complete onboarding with ZATCA, including the necessary technical and cryptographic steps.
- Test thoroughly in ZATCA's sandbox and simulation environments before going to production.
- Ensure invoices include required fields, QR codes, and support for credit and debit notes.
How Odoo's Saudi Localization Supports Phase 2
The good news for Odoo users is that Odoo's Saudi localization supports ZATCA Phase 2. It covers the key parts of the journey, including:
- Onboarding across sandbox, simulation, and production environments.
- Fatoora submission of invoices to the ZATCA platform.
- QR code generation on simplified invoices.
- Support for credit and debit notes.
- POS ZATCA handling for point-of-sale retail scenarios.
This means that, with proper configuration, an Odoo-based business can meet its Phase 2 obligations within the same system it already uses to run operations no separate, disconnected e-invoicing tool required.
How ERPNAS Helps Saudi Clients
Compliance is where planning meets detail, and that is exactly where a partner helps. As an Odoo Silver Partner with an on-site presence in the Gulf and around a decade of Odoo delivery experience, ERPNAS helps Saudi businesses:
- Assess their current setup against Phase 2 requirements.
- Configure and test the Odoo Saudi localization, from sandbox through production onboarding.
- Validate B2B clearance and B2C QR/reporting flows against real transactions.
- Train teams so day-to-day invoicing stays compliant.
A Quick Note
This article is informational and reflects our understanding of ZATCA Phase 2; it is not legal or tax advice. For decisions about your specific obligations and deadlines, please consult ZATCA's official guidance and your professional advisors.
Ready to get your Saudi e-invoicing right? Book a consultation or demo with ERPNAS, and let our Odoo specialists help you implement ZATCA Phase 2 with confidence.