Saudi e-invoicing (ZATCA Fatoora) guide for tailors and garment shops

Who Fatoora applies to

ZATCA, the Zakat, Tax and Customs Authority, says e-invoicing applies to all persons subject to VAT, and to any party that issues tax invoices on behalf of a VAT-registered supplier. Non-resident taxpayers are excluded. Source: What is e-invoicing and the ZATCA e-invoicing FAQ.

So the first question for a tailor is whether you are VAT registered. ZATCA's guide for small and medium businesses sets the lines:

• Mandatory registration when your taxable revenue exceeds SAR 375,000 in twelve months.
• Voluntary registration is open when revenue is above SAR 187,500 and not above SAR 375,000.
• The standard VAT rate is 15%.

A shop that is not registered does not issue tax invoices. A registered thobe tailor or abaya atelier is in, whatever its size.

The two phases: generation, then integration

Phase 1, generation, from 4 December 2021. You generate and store tax invoices and credit and debit notes through an electronic solution that meets ZATCA's requirements. ZATCA's Phase 1 preparation page is plain about what no longer counts: handwritten invoices and invoices typed in text editing tools are not e-invoices. A paper invoice that is scanned or copied into electronic form is not one either. The solution must not allow uncontrolled access, tampering, or more than one invoice sequence.

Phase 2, integration, from 1 January 2023 in waves. Your solution connects to ZATCA's Fatoora platform and invoices are produced in the required format. ZATCA notifies each group at least six months ahead. Source: roll-out phases.

Once you are integrated, ZATCA's simplified guide describes two routes:

• Standard tax invoices go to ZATCA first. ZATCA clears the invoice and returns it, and only then do you share it with the buyer.
• Simplified tax invoices go to the customer straight away, and your solution reports them to ZATCA within 24 hours.

Phase 2 also brings XML, a cryptographic stamp, a hash and a UUID on each invoice, per the FAQ, all produced by your solution.

Integration waves that reach small shops

ZATCA has moved through the waves from the largest taxpayers down. The two latest matter most for tailors.

Look at each year on its own. One year above the line, for example a strong Ramadan and Eid season in 2024, is enough under the wording of both announcements. ZATCA notifies targeted taxpayers directly, but do not wait for the notice if your figures already put you in a wave.

Wave 25 sits at the voluntary registration line, so it covers most registered shops not in an earlier wave. Check the roll-out phases page for later waves.

Simplified or standard: which invoice a tailor issues

Sources: What is e-invoicing, Phase 1 preparation and the simplified guide. Many tailors issue both. Collect each company customer's legal name and VAT number before the first invoice.

The QR code on a simplified tax invoice

ZATCA requires a QR code on every simplified tax invoice, generated by your e-invoicing solution to ZATCA's specifications. A picture of a QR code pasted onto a template does not meet that. According to the ZATCA FAQ, the Phase 1 QR code shows, when scanned:

1. The seller's name
2. The seller's VAT registration number
3. The date and time of the invoice
4. The total with VAT
5. The total VAT

The simplified guide shows a customer scanning it with ZATCA's VAT app.

Fines for e-invoicing violations

ZATCA's guide to VAT violations and penalties, in force from 30 January 2022, works on a warning first and then rising fines for a repeat of the same violation.

If the same violation does not happen again within 12 months, the count starts over.

What Tailoq does today, and where Fatoora sits

Tailoq is not certified by, approved by or connected to ZATCA, and it is not a Fatoora e-invoicing solution. If you are VAT registered, the tax invoice your customer receives must come from a compliant e-invoicing solution. Tailoq runs the shop and the workshop around it.

What Tailoq does today for a Saudi shop:

• Saudi setup. Choose Saudi Arabia at setup and Tailoq starts with SAR, VAT at 15% and centimetres, with Mada, Tamara, Tabby, card and cash as payment methods.
• VAT on every order. Prices are VAT inclusive, and the order shows the net, the VAT and the total.
• A5 order form headed Tax Invoice. An order printed from its order form carries the shop name, legal name, address and tax number on your shop's record, the SI number and date, the customer's name and contact, the price, discount, VAT included, total with VAT, advance, balance, the advance and balance receipt numbers your staff type in, your terms and two signature lines.
• Accounts. A VAT return summary, supplier bills and CSV downloads.

What that print does not have: a QR code, the time of issue, the buyer's VAT number, XML, a cryptographic stamp or any link to Fatoora. Its labels are in English and the tax number is labelled TRN. So treat it as your order form and job record, and issue the tax invoice from your compliant solution.

See Tailoq for thobes and abayas on our tailoring software for Saudi Arabia page, or read this guide in Arabic. Trading in the Emirates too? The UAE e-invoicing guide covers its rules. Tailoq in Arabic: تيلوك بالعربية.

What to do now

1. Confirm your VAT registration and VAT number.
2. Compare your VAT-liable revenue for each year from 2022 to 2025 with SAR 375,000 and SAR 187,500.
3. If any year is above SAR 187,500, plan to integrate with Fatoora by 1 February 2027.
4. Check that your solution issues simplified and standard invoices with the QR code and connects to Fatoora.
5. Stop handwritten, Word and Excel invoices for VAT sales.
6. Agree who tells ZATCA if the solution fails, since not telling them is a violation.

Official sources

• Roll-out phases
• Phase 1 preparation
• Wave 25 criteria
• E-invoicing FAQ
• Violations and penalties