ZATCA e-invoicing software: what it must do

Short answer: e-invoicing software in Saudi Arabia must issue tax invoices electronically with the fields ZATCA requires, add a QR code to simplified tax invoices, and keep a tamper-resistant record of every invoice, credit note and debit note. Once your business is called for Phase 2, it must also integrate with ZATCA's platform so invoices are cleared or reported. Software that only produces a nice-looking PDF does not meet the rules.

ZATCA, the Zakat, Tax and Customs Authority, introduced e-invoicing in two phases. Phase 1, often called the generation phase, applies to VAT-registered businesses. Phase 2, the integration phase, is rolled out in waves, and ZATCA notifies each business in advance. This guide covers what the software has to do in each phase and what to check before you commit. It is general guidance, not legal advice, so confirm the current rules with ZATCA.

Phase 1: generate and store invoices electronically

In Phase 1 the software must create tax invoices, credit notes and debit notes in electronic form, and store them. Handwritten invoices, and invoices typed into a word processor, are not acceptable. There are three kinds of document to handle:

• Standard tax invoices, usually issued business to business
• Simplified tax invoices, usually issued to consumers
• Credit notes and debit notes that correct an invoice already issued

Each invoice carries the required details, such as the seller's name and VAT registration number, the date of issue, a sequential number, the line items with their VAT, and the totals. On business-to-business invoices, the buyer's VAT number is needed where the buyer is registered. The invoice must be in Arabic, and other languages may appear alongside it.

The QR code

Simplified tax invoices must carry a QR code. In Phase 1 the code encodes a few basic fields: the seller's name, the VAT registration number, the date and time of the invoice, the invoice total including VAT, and the VAT amount. The code is not a picture of text; it is an encoded payload, so it either scans correctly or it does not. The most reliable test is to print a real invoice and scan it with ZATCA's own app.

What the software must not allow

ZATCA's rules are as much about what software prevents as about what it produces. Compliant software should not allow:

• Use without a named, logged-in user
• Editing or deleting an issued invoice without a trace
• More than one invoice sequence on the same issuing unit
• Changing the invoice date or time to back-date a document

Corrections happen through credit notes or debit notes, which keep a link to the original invoice. If a vendor shows you an Edit button on an issued invoice, ask what happens to the original.

Phase 2: integration with ZATCA

Phase 2 turns the software from a document generator into a connected system. Invoices are produced in a structured XML format, signed with a cryptographic stamp, linked to the previous invoice by a hash, and sent to ZATCA's platform. Standard tax invoices go through clearance before they are shared with the buyer. Simplified tax invoices are reported to ZATCA after they are issued, within the time ZATCA sets.

Before any of that, the software has to be onboarded: each unit that issues invoices registers with ZATCA and receives a cryptographic stamp identifier. Ask the vendor how onboarding works, who holds the keys, and what happens when ZATCA's platform rejects an invoice.

Beyond the invoice: VAT and the books

Compliant invoices are only the start. The same data should feed your ledger and your VAT return, so the figures you file match the invoices you issued. Look for software that posts each invoice to the accounts, tracks payments against invoices, shows aged receivables, and prepares the VAT return figures from posted entries. Filing itself still happens on ZATCA's portal.

Checklist: what to ask e-invoicing software

• Does it issue standard and simplified tax invoices, credit notes and debit notes electronically?
• Is every invoice in Arabic, with English alongside if you need it?
• Does the simplified invoice carry a QR code that scans in ZATCA's app?
• Are issued invoices locked, with corrections made only by credit or debit note?
• Does every action require a named, logged-in user?
• Is there one sequence per issuing unit, with dates that cannot be changed?
• What is the Phase 2 status: live, in testing or planned?
• How does onboarding work, and who holds the keys?
• Do invoices post to the ledger and feed the VAT return figures?
• Can you export invoices and VAT figures when your accountant asks?

How Seen handles e-invoicing

Seen issues ZATCA Phase 1 tax invoices today. Every tax invoice shows Arabic and English side by side, your VAT number and your customer's, and the QR code, added the moment you issue it. Invoices print from your browser. Credit notes, customer payments, customer statements and aged receivables are built in, and every invoice posts to a double-entry ledger.

The VAT return is live too. Seen fills the 16 boxes of the ZATCA return from your posted entries, checks them against your VAT accounts and exports them to CSV; you then file on the ZATCA portal. Customers can pay an invoice online through a payment link, and view their quotes and invoices through a private client portal.

ZATCA Phase 2 is not live in Seen yet; it is coming soon. When it ships, each business will choose automatic or manual sending to ZATCA, or leave it off. If ZATCA has already called your business for Phase 2, Seen cannot clear or report your invoices with ZATCA today, so plan accordingly.

Before you decide

Ask every vendor to issue a simplified invoice in front of you, print it and scan the QR code. Then ask to see a credit note against it. Confirm the current requirements and your Phase 2 wave on ZATCA's website.

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