Regulatory updates - Saudi Arabia

On July 10, 2025, the Zakat, Tax and Customs Authority (ZATCA) announced the criteria for Wave 23 of the e-invoicing integration phase. 

This wave targets businesses with VAT-subjected revenues exceeding 750,000 SAR (approximately 172,500 EUR) during 2022, 2023, or 2024. Affected taxpayers must integrate their systems with the FATOORA platform by March 31, 2026. 

ZATCA will notify all impacted entities to ensure timely compliance. 

On June 27, 2025, ZATCA announced it will extend its cancellation of fines and penalties initiative for six additional months, until December 31, 2025.

ZATCA clarifies that taxpayers will have to fulfill the following criteria to benefit from the initiative:

• Be registered under relevant tax laws;
• Submit any outstanding VAT returns;
• Pay all principal tax debt relating to the returns.

Taxpayers may also request installment payment plans and are encouraged to follow the guidelines published on ZATCA’s website for further details about the initiative.

It is emphasized that the exemption does not cover:

• Tax evasion violations;
• Penalties paid before the effective date of the exemption period;
• Penalties for VAT returns submitted after June 30, 2025,

This resolution approves extensive amendments, making it one of the most comprehensive updates since the regulations were first issued.

Key changes include stricter criteria for forming VAT groups and refining rules concerning the cessation of economic activities, nominal supplies, and transfers of going concern (TOGC). Additionally, the amendments clarify VAT treatment for special zones, services to non-GCC residents, government grants, financing contracts, and online platforms. Furthermore, the revisions align the issuance timeframe for credit and debit notes with that of tax invoices, requiring them to be issued no later than fifteen days after the month following the date on which the event occurs.

Although these changes do not directly impact e-invoicing processes, it is crucial for all businesses operating in the Kingdom of Saudi Arabia and their tax advisors to thoroughly reassess and analyze these amendments to understand their impact on business models and compliance requirements.

The announcement can be accessed here. The latest version of the regulations, including these amendments, is available on the ZATCA official website.