ZATCA E-Invoicing for Contractors: Waves and Deadlines

Every resident VAT taxpayer in Saudi Arabia, electricity-network contractors included, must issue its invoices electronically under the rules of the Zakat, Tax and Customs Authority (ZATCA). E-invoicing arrived in two phases: the Generation phase from 4 December 2021, and the Integration phase with ZATCA’s FATOORA platform from 1 January 2023, rolled out wave by wave. Wave 25, announced on 24 July 2026, has a deadline of 1 February 2027.

This guide covers the phases, dates and technical requirements; how an e-invoice relates to the extract behind it; how to prepare extract data for invoicing; and where ELX fits in, and where it stops.

What is ZATCA e-invoicing for contractors, and who must comply?

E-invoicing means tax invoices are issued and stored through an electronic solution that meets ZATCA’s requirements, instead of being written by hand. There is no separate regime for contractors: the same general rules apply to contracting companies, including those executing utility work orders.

According to ZATCA’s e-invoicing FAQ, the Generation phase applies to all VAT taxpayers except non-residents, and to anyone who issues tax invoices on their behalf. So if your company is resident and subject to VAT, e-invoicing has applied to you since 4 December 2021. When your solution must connect to FATOORA depends on the wave ZATCA notifies you of.

The standard VAT rate that applies to those invoices has been 15% on all taxable goods and services since 1 July 2020, up from 5%.

FATOORA

ZATCA’s platform that taxpayers’ e-invoicing solutions connect to in Phase 2.

Generation phase (Phase 1)

Requires invoices to be issued and stored through compliant electronic solutions.

Integration phase (Phase 2)

Requires the solution to connect to FATOORA and issue invoices to set technical specifications.

Wave

A taxpayer group ZATCA targets with an integration deadline, notified at least six months ahead.

E-invoicing solution

The software that actually issues your invoices: part of an accounting package or ERP, or a standalone product.

What is the difference between the Generation and Integration phases?

Phase 1 ended manual invoicing: every invoice now has to be issued and stored through a compliant electronic solution. Phase 2 changes how that solution works: it connects to FATOORA and issues invoices in a structured format with technical integrity elements. The table sets out the differences.

The key milestones, as announced by ZATCA, are set out below:

Who is in Wave 25, and what is the deadline?

On 24 July 2026, ZATCA announced the 25th wave of the Integration phase. It covers taxpayers whose VAT-subject revenue exceeded SAR 187,500 in any of 2022, 2023, 2024 or 2025. Those taxpayers must integrate their e-invoicing solutions with FATOORA by 1 February 2027.

Note two details. The threshold is measured on VAT-subject revenue, and crossing it in any single year of the four is enough: a contractor that exceeded it in 2023 alone is still in scope on the announcement’s wording. ZATCA’s notification to your company remains the reference for its wave.

ZATCA notifies each taxpayer of its wave at least six months ahead, and Wave 25 was announced a little over six months before its deadline. At the time of writing, in September 2026, roughly four months remain: not long if your solution is not yet ready to integrate.

1. Confirm scope

   Check your VAT-subject revenue for each year from 2022 to 2025, and watch for ZATCA’s notification.

2. Review your solution

   Ask your provider whether it is ready for Phase 2 and the requirements in the next section.

3. Check the source data

   Extract numbers, PO numbers, values, fines and VAT are what your invoices are built from.

4. Assign ownership

   Decide who approves extracts, who issues invoices, and who follows up approved extracts that have not been invoiced yet.

5. Plan the timeline

   Aim to integrate well before the deadline, not in its final weeks.

What are the technical requirements in the Integration phase?

ZATCA’s e-invoicing controls resolution (Governor’s Decision No. 62738 dated 23/11/1443H) defines the Integration-phase invoice. Your solution implements it, but knowing the elements helps you ask your provider the right questions.

Nobody enters these by hand; the solution generates them for each invoice. Your job is to choose a solution ready for Phase 2 and feed it complete, correct data.

Weighing an all-in-one accounting and invoicing system against a specialised work-order system? Read ERP vs a specialised system for contractors.

How does an extract relate to an e-invoice?

The extract is the contractor’s contractual claim to the employer for completed, approved work, net of fines and with VAT added. The tax invoice is a regulated document, issued from a compliant solution under e-invoicing rules. This guide treats them as separate documents, even when their figures match; if the document you submit to the employer also serves as your tax invoice, it must itself be issued from a compliant solution. Your tax adviser can confirm the right approach for your contracts.

• Extract: what the contractor is owed under the contract; on utility work-order contracts, built from completed orders’ achievement certificates.
• Tax invoice: issued electronically from a compliant solution and connected to FATOORA once the company’s wave arrives.
• The link: the approved extract’s net value, VAT and invoice total are the invoice’s inputs.

In practice, any error in the extract carries into the invoice: a wrong quantity on a certificate, a fine booked against the wrong order, an incorrect PO number. Corrections after issue usually go through a credit or debit note, itself an XML document in the Integration phase. Getting the invoice right starts with getting the extract right.

For an extract’s contents and a worked calculation, see the guide to contractor extracts; for how it differs from the certificate behind it, read achievement certificate vs extract.

How do you prepare extract data for invoicing?

An e-invoice is only as accurate as the data behind it. Before any extract’s figures go to whoever issues your invoices, run through this list:

• The extract number and PO number are recorded and match the employer’s documents.
• Every work order has a complete achievement certificate, with quantities at its contract’s prices.
• Each fine is recorded against the order it belongs to, with its supporting reference.
• The VAT rate used is the one in force; the standard rate has been 15% since 1 July 2020.
• Net value, VAT and invoice total are checked for each order and for the extract as a whole.
• The extract’s approval date is recorded, and it is clear who issues the invoice.
• The company’s VAT number and commercial registration are up to date in every system.
• Extract attachments and certificates are kept together for any review.

Common mistakes that trip up invoicing

• Taking figures from a draft or side spreadsheet instead of the approved extract.
• Calculating VAT one way on the extract and another on the invoice, so the documents disagree.
• Keeping the VAT rate in several spreadsheets, so nobody can be sure it is the same everywhere.
• Mixing work orders from different contracts in one claim, which mixes prices and PO numbers.
• Leaving approved extracts uninvoiced because nobody owns the follow-up.

Where does ELX fit in e-invoicing, and where does it stop?

ELX is a bilingual cloud (SaaS) service, hosted and operated by Matrix, that runs in the browser with no servers needed on the contractor’s side. Built for electricity-network contractors in Saudi Arabia, it carries each work order from registration to archive, with extracts as the final stage. In invoicing, it prepares the extract figures and calculates their VAT; it does not issue the e-invoice. See extracts and achievement certificates.

1. Create the extract

   Record the extract number, PO number, preparation date and notes.

2. Import the work orders

   Choose a contract and work description, and the system imports the matching orders that have achievement certificates, with their values.

3. Fines and VAT

   Enter a fine per order where one applies. The system calculates net value, VAT at the rate in settings, each order’s invoice total and the overall total.

4. Attachments

   Attach the extract’s supporting documents so the whole claim sits in one place.

5. Approval and archive

   The extract stays pending until an accreditation date is entered; its work orders then move to the archive automatically.

The VAT rate is set once in the general settings, under permissions, settings and master data, not typed into each extract, and administrators control each user’s rights on every screen. The company profile holds the commercial registration and VAT number. Note that “invoice total” is the default name of a calculated field on the extract, not an issued tax invoice.

For follow-up, the dashboard shows pending versus approved extracts. On the extracts screen, finance can browse each extract and the details of every order in it, from value and fine to VAT and invoice total, and compare them with the invoices issued from its e-invoicing solution.

Compliance goes beyond tax: see the guide to the Saudi PDPL for contractors. To see the extract workflow from certificate to approval, request a demo.