๐ธ๐ฆ Saudi Arabia ยท Compliance guide
ุงูุนุฑุจูุฉZATCA Phase 2 E-Invoicing for Construction Companies
What the Fatoora integration mandate means for Saudi contractors (progress claims, advance payments, retention) and which construction software vendors say they support it.
By WrenchStack Research ยท Published June 2026 ยท Updated 1 October 2026 ยท Not tax advice; confirm your status with ZATCA or your tax advisor.
โ The short version
Wave 24's integration window has closed, and Wave 25 has been announced. EY reports that Wave 24 of ZATCA's Phase 2 rollout covered taxable turnover above SAR 375,000 in 2022, 2023 or 2024, with integration between 1 April and 30 June 2026, a date that has now passed. EY reports that Wave 25, announced in July 2026, covers taxable turnover above SAR 187,500 in any year from 2022 to 2025, and that taxpayers in it should prepare to comply with Phase 2 starting from 1 February 2027. Phase 2 requires your invoicing system to integrate with ZATCA's Fatoora platform and send e-invoices to it. If you were in Wave 24 and are not there yet, you are non-compliant and should onboard now. Project-management platforms like Procore or Aconex do not satisfy this: they do not issue tax invoices, so the e-invoice must come from your accounting or ERP system.
What Phase 2 actually requires
Saudi e-invoicing arrived in two phases. EY describes Phase 1 (Generation), effective 4 December 2021, as mandating the generation of e-invoices and e-notes, including related processing and record keeping. Phase 2 (Integration), effective 1 January 2023 and implemented in waves, is the harder step: your system must integrate with ZATCA's Fatoora platform and transmit e-invoices and e-notes to it.
Vendors in our directory describe different details: Qoyod says it sends each Phase 2 invoice to Fatoora with a QR code, digital signature and cryptographic stamp; First Bit says it sends Phase 2 e-invoices with digital signatures; and Daftra says it adds the QR code automatically. This guide does not set out ZATCA's technical specifications, so check them in ZATCA's e-invoicing documentation and ask any vendor to show its Fatoora integration working before you sign.
ZATCA calls businesses into Phase 2 in waves by taxable turnover, and EY reports that ZATCA notifies the affected taxpayers before they link their systems to Fatoora. According to EY, Wave 24 covered taxable turnover above SAR 375,000 in 2022, 2023 or 2024, with integration between 1 April and 30 June 2026; that window has now closed. EY reports that Wave 25, announced in July 2026, covers taxable turnover above SAR 187,500 in any year from 2022 to 2025, and that taxpayers in it should prepare to comply with Phase 2 starting from 1 February 2027. A small contractor above that level should expect a ZATCA notice, so watch your Fatoora notifications.
What to test for construction billing
Construction billing includes progress claims, advance payments, retention and supply-and-install contracts. Whether a tool handles these well is a separate question from whether it supports Phase 2, so before you commit to any system, make the vendor demo your flows:
- Progress claims (ุงูู ุณุชุฎูุตุงุช): can the system raise a compliant tax invoice against a contract for each certified progress claim, with correct cumulative quantities, previous-claim deductions and VAT?
- Advance payments: can it issue a compliant advance-payment invoice, then offset that advance correctly across later claims?
- Retention (ู ุญุชุฌุฒุงุช ุงูุถู ุงู): retention changes when money falls due; your system must keep VAT treatment correct on invoiced amounts while tracking retained balances to final account.
- Supply-and-install contracts: mixed goods and services billing on one contract.
- Subcontractor chain: matching incoming subcontractor e-invoices to certificates, and handling withholding tax where it applies.
Which construction software says it is ZATCA-ready?
From the 14 software listings in our Saudi directory, these are the ones advertising ZATCA e-invoicing capability, with our notes on fit. Focus Softnet also sells a separate ZATCA e-invoicing module for its ERP and others; its Focus CAFM product is not an invoicing system. (Always verify a vendor against ZATCA's official solution-provider directory before signing.)
| Platform | ZATCA status | Fit | Pricing |
|---|---|---|---|
| Qoyod | Says it is ZATCA-certified; its plan guide puts Phase 2 integration on the Pro (Professional) and Advanced plans only | Cloud accounting with e-invoicing, inventory and POS; projects and tasks on Pro and Advanced | Published, yearly in SAR: Basic 1,200 (Phase 1 only), Professional 1,800 (Phase 2); 14-day free trial |
| Wafeq | Says it supports Phase 2 and links directly to Fatoora | Accounting with projects and cost centres that filter the profit and loss report: profit by job | Published: Starter SAR 119/month or SAR 1,190/year, excl. VAT; 14-day free trial |
| First Bit ERP | Says it sends Phase 2 e-invoices to Fatoora and generates VAT and WHT returns | Construction ERP: project cost control, procurement, finance, HR and payroll, equipment | Quote-based |
| Medad ERP | Says it is approved for ZATCA Phase 2 | Saudi SME accounting and ERP: finance, inventory and payroll in one | Quote-based (Medad Online priced by number of users) |
| Daftra | Says it meets Phase 1 and Phase 2 at no extra cost | Contracting module with progress-payment statements, retention and per-project profit reports | Published in USD: from $30/month, or $240/year |
| Onyx Pro ERP | Vendor says it issues Phase 2 e-invoices linked to Fatoora | Arabic and English ERP with project management and payroll modules; no contractor-specific features described | Quote-based |
| PACT ERP | Site lists ZATCA e-invoicing support; no ZATCA approval claimed | Contracting ERP: scheduling, budget and cost tracking, procurement, payroll | Quote-based |
Source: WrenchStack Saudi directory, verified September 2026. Statuses reflect what each vendor publishes; confirm certification scope for your wave during the demo.
And the tools that DON'T need to comply
Oracle Aconex, Oracle Primavera P6, Autodesk Forma (formerly Autodesk Construction Cloud), Procore, PlanRadar, Bentley Systems are project-management, BIM and site tools, not invoicing systems: they do not issue tax invoices, so ZATCA e-invoicing stays in your accounting or ERP system. If you run projects in one of these, pair it with an accounting or ERP tool from the table above for billing. Don't reject a PM platform for "missing ZATCA", and don't assume your PM platform covers it.
Compliance checklist for contractors
- Confirm your status. EY reports that Wave 24 covered taxable turnover above SAR 375,000 in 2022, 2023 or 2024, with integration between 1 April and 30 June 2026 (now passed). If your taxable turnover exceeded SAR 187,500 in any year from 2022 to 2025 and you were not in an earlier wave, EY reports that Wave 25 covers you, with Phase 2 compliance starting from 1 February 2027. Check the Fatoora portal and your registered contacts for ZATCA's notice.
- Pick software now. Shortlist from the table above; cross-check ZATCA's solution-provider directory. If your deadline has already passed, onboarding is urgent: don't add more non-compliant months; otherwise leave time to set up and test before your date.
- Demo YOUR billing flows. Progress claims, advances, retention, supply-and-install: in the demo, on your real contract structure.
- Connect to Fatoora. Your vendor or accountant connects your invoicing solution to the Fatoora platform; agree who does each step.
- Run a test. Issue a small batch of real e-invoices through the integration before switching the whole business over.
- Train the back office. The people raising claims need to know which invoice data the integration requires; fix errors at source, not at month-end.
Frequently asked questions
Does ZATCA e-invoicing apply to construction companies?
EY describes Phase 1, effective 4 December 2021, as mandating the generation of e-invoices and e-notes with related processing and record keeping, and Phase 2, effective 1 January 2023 and implemented in waves, as integrating a taxpayer's system with ZATCA and transmitting e-invoices and e-notes to it. EY's reports of Waves 24 and 25 define them by taxable turnover, not by industry, so a contracting business is called into Phase 2 when its turnover crosses a wave's threshold; EY reports that Wave 25 reaches taxable turnover above SAR 187,500.
Has the Wave 24 deadline passed, and what about later waves?
Yes. EY reports that Wave 24 covered taxpayers with taxable turnover above SAR 375,000 in calendar year 2022, 2023 or 2024, with integration between 1 April and 30 June 2026. If you were in scope and are still not integrated, you are now non-compliant and should onboard immediately. A later wave has been announced: EY reports that ZATCA announced Wave 25 on 24 July 2026 for taxable turnover above SAR 187,500 in any of 2022 to 2025, and that taxpayers in it should prepare to comply with the Phase 2 requirements starting from 1 February 2027. EY also reports that ZATCA notifies the affected taxpayers before they link their systems to Fatoora, so keep checking your Fatoora notifications.
What does Phase 2 (Integration) actually require?
EY describes Phase 2 as integrating your invoicing system with ZATCA and transmitting e-invoices and e-notes to it, through ZATCA's Fatoora platform. Vendors in our directory describe different details: Qoyod says it sends each Phase 2 invoice to Fatoora with a QR code, digital signature and cryptographic stamp; First Bit says it sends Phase 2 e-invoices with digital signatures; and Daftra says it adds the QR code automatically. This guide does not set out ZATCA's technical specifications; check them in ZATCA's e-invoicing documentation and ask your vendor to show its Fatoora integration working.
Is Procore, Aconex or Primavera ZATCA-compliant?
The question does not apply: these are project-management, document-control and scheduling platforms, not invoicing systems. They do not issue tax invoices, so ZATCA e-invoicing stays in your accounting or ERP system (for example Qoyod, Wafeq, Daftra or First Bit, which each say they support Phase 2). A contractor that runs one of these platforms still needs a ZATCA-compliant accounting or ERP system for e-invoicing.
How does e-invoicing handle progress claims, advance payments and retention?
These are the construction-specific flows to test before you buy: how the system raises the tax invoice for each certified progress claim (mustakhlas) against the contract, how it invoices advance payments and offsets them on later claims, and how it tracks retention. Whether a tool handles these flows well is a separate question from whether it supports Phase 2, so make the vendor demo YOUR billing scenarios, and confirm the VAT treatment of each with your tax advisor.
What happens now if we are still not integrated?
If you were in Wave 24, its integration window (1 April to 30 June 2026, per EY) has closed and you are non-compliant now. If you fall in Wave 25, EY reports that you should prepare to comply with Phase 2 starting from 1 February 2027, so plan onboarding before then. EY says businesses should comply to preclude possible penalties; confirm the current penalty rules with ZATCA or your tax advisor. If you are behind, treat onboarding as urgent, not optional.
Compare the options side by side
Independent reviews of 26 Saudi construction vendors and official bodies: pricing, pros and cons, and compliance context, with no pay-to-play.