What is ZATCA Phase 2?

ZATCA Phase 2 is the integration phase of Saudi Arabia's e-invoicing programme. Invoices must be generated as structured XML, cleared or reported through ZATCA's Fatoora platform, and carry a cryptographic stamp and QR code. It is rolled out in waves by taxpayer size.

Does Odoo support ZATCA Phase 2?

Yes. With the Saudi localisation and a compliant integration, Odoo can generate ZATCA-compliant XML invoices with QR codes and connect to the Fatoora platform for clearance and reporting. Correct configuration and testing are essential.

How are ZATCA waves decided?

ZATCA assigns businesses to integration waves based on annual revenue thresholds and notifies them of their compliance date. Thresholds have been lowered over successive waves, bringing progressively smaller businesses into scope.

ZATCA Phase 2 on Odoo: The Saudi E-Invoicing Guide

Saudi Arabia was an early mover on e-invoicing, and its programme, run by the Zakat, Tax and Customs Authority (ZATCA), is now well into Phase 2. For businesses running Odoo, the good news is that the platform can meet the requirement. The work is in configuring it correctly, integrating with ZATCA's Fatoora platform, and testing thoroughly before your assigned date, because a broken invoicing flow in production is not an option.

Key takeaways

Phase 2 is the integration phase: structured XML invoices, cryptographic stamps, QR codes, and clearance or reporting through Fatoora.
Businesses are brought in by waves based on revenue thresholds, which have been lowered over time to include smaller taxpayers.
Odoo supports ZATCA Phase 2 with the Saudi localisation and a compliant integration, but configuration and testing are what make it work.
Standard invoices are cleared before sharing with the buyer, while simplified invoices are reported shortly after issue.

How ZATCA Phase 2 works

Phase 1 of the Saudi programme required businesses to generate electronic invoices in a structured form with QR codes. Phase 2, the integration phase, goes further: your invoicing system must integrate with ZATCA's platform so that invoices are validated against the authority's requirements. In practice there are two flows. Standard tax invoices (typically B2B) go through a clearance model, where ZATCA validates and clears the invoice before it is shared with the buyer. Simplified tax invoices (typically B2C) follow a reporting model, where the invoice is issued with a QR code and reported to ZATCA within a short window.

Each compliant invoice carries a cryptographic stamp, a UUID, a hash and a QR code, and is formatted to the required XML specification. That is a meaningful technical bar, and it is why integration is a project rather than a setting.

Waves and thresholds

ZATCA does not switch everyone on at once. It assigns businesses to integration waves based on annual revenue and notifies each group of its compliance date. Over successive waves the revenue threshold has been lowered, steadily bringing smaller businesses into scope. If you operate in the Kingdom, the practical step is to confirm which wave you fall into and its date, then work back from there, because integration and testing take time.

Odoo and ZATCA: what integration involves

Making Odoo compliant with ZATCA Phase 2 is a defined piece of work:

Saudi localisation. Enable the Saudi fiscal localisation, VAT treatment and Arabic and English invoice layouts.
Structured output. Configure Odoo to produce the required XML with the cryptographic stamp, UUID, hash and QR code.
Fatoora integration. Onboard and connect to ZATCA's platform for clearance and reporting, with the correct certificates.
Workflow mapping. Account for every invoicing path, standard and simplified, including credit and debit notes.
Testing. Validate in ZATCA's testing environment before going live, then monitor closely after cutover.

The failure mode is treating ZATCA as a plugin you switch on the week before your deadline. Clearance rejections in production stop you invoicing. Test early, test properly.

UAE and Saudi together

Many groups operate on both sides of the border, and the two regimes are not identical. Saudi Arabia uses a clearance and reporting model through Fatoora, while the UAE is rolling out a decentralised Peppol model through Accredited Service Providers, with go-live from 2027. If you invoice in both markets, plan them together so one ERP handles both cleanly. Our UAE e-invoicing guide covers the Emirates side in full.

How Kaido helps

Kaido configures and integrates Odoo for ZATCA Phase 2 compliance, from Saudi localisation and structured XML output to Fatoora onboarding, testing and training. We are certified specialists with 50 or more delivered projects across GCC and MENA and a 100 percent project success rate, and every engagement is fixed price and fixed scope. Whether you are in a current wave or preparing for a future one, we get your invoicing compliant without breaking what already works.