ZATCA Phase 2 · Saudi Arabia E-Invoicing

ZATCA Integration for Microsoft Dynamics 365 Business Central

Connect Business Central, Dynamics NAV, LS Central and LS NAV to ZATCA's FATOORA platform. Generate ZATCA XML invoices, register devices, track accepted and rejected invoices, and archive e-invoices as PDF/A-3. Built and supported by Dynamics 365 Zone.

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Business Central and LS Central screens on tablets, phones and a point-of-sale terminal beside the ZATCA e-services portal

Automate ZATCA Phase 2 E-Invoicing in Saudi Arabia

If you issue VAT invoices in Saudi Arabia, ZATCA e-invoicing is no longer something finance can handle at month-end. Under Phase 2, invoices have to be produced in ZATCA's XML format and connected to ZATCA's FATOORA platform, and every accepted or rejected invoice needs to be tracked. Doing that by hand, or through spreadsheets and portal uploads outside your ERP, is slow and hard to audit.
The D365 Zone ZATCA integration is a ready-to-use app that moves this work into the system you already run. It supports Microsoft Dynamics 365 Business Central, Microsoft Dynamics NAV, LS Central and LS NAV, handles device registration, generates ZATCA XML invoices, syncs them to ZATCA, shows what was accepted or rejected, and archives each e-invoice as PDF/A-3.

What Is ZATCA Integration?

ZATCA is Saudi Arabia's Zakat, Tax and Customs Authority. ZATCA integration means connecting your accounting or ERP system to ZATCA so that e-invoices are generated in the prescribed format and exchanged with ZATCA's FATOORA platform, instead of being created and uploaded manually.
A ZATCA connector for Business Central adds these e-invoicing steps to the sales process your team already follows, so compliance work happens where the invoices are created.

ZATCA Phase 1 vs Phase 2: Waves and Deadlines

Saudi e-invoicing is split into a Generation Phase and an Integration Phase. The Integration Phase is introduced in waves, so there is no single deadline for every business.

Official name

Generation Phase

Integration Phase

Started

4 December 2021

1 January 2023, in successive waves

Who it applies to

VAT-registered taxpayers in the Kingdom

Taxpayers ZATCA selects for each wave

What it requires

Generate and store invoices electronically; simplified invoices carry a QR code

Connect your system to ZATCA's FATOORA platform, with signed XML invoices and a QR code

How the Phase 2 waves work

ZATCA publishes selection criteria for each wave, based on VAT-subject revenue in the reference years it names, and notifies the taxpayers it selects. ZATCA's guidance is to notify them at least six months before their integration date. Which deadline applies to you depends on the wave you fall in and on the notification ZATCA sends you.
For example, in its Wave 25 announcement of 24 July 2026, ZATCA set the criteria at VAT-subject revenue above SAR 187,500 in 2022, 2023, 2024 or 2025, with integration required no later than 1 February 2027. Earlier waves used higher thresholds and different dates. ZATCA may announce further waves.

Regulatory information reviewed November 2026. ZATCA's official announcements at zatca.gov.sa and your own ZATCA notification are the authoritative sources, and they can change. Meeting ZATCA requirements remains the taxpayer's responsibility; we validate the integration against your scope during implementation.

Business Central ZATCA E-Invoicing Features

What the ZATCA integration handles, from device registration to archiving.

ZATCA Phase 2 Integration

Runs the Integration Phase e-invoicing steps from inside Business Central, Dynamics NAV, LS Central or LS NAV rather than in a separate tool.

FATOORA Connectivity

E-invoices sync directly from your Dynamics system to ZATCA's FATOORA platform.

XML Invoice Generation

Generates invoices in the ZATCA-prescribed XML format, so e-invoices can be sent to and received from ZATCA.

Invoice Validation

Validation checks on invoice and customer master data help catch missing details, such as tax ID or address, before ZATCA rejects the invoice.

QR Code Generation

Produces the QR code ZATCA requires and carries it into the customer-facing invoice.

Device Registration

Device registration with ZATCA is handled inside the app, without a separate manual process.

Invoice Submission

Submits e-invoices to ZATCA from your ERP and records the submission against the invoice.

Acceptance and Rejection Tracking

Dashboards and reports show which invoices ZATCA accepted or rejected. Rejected or failed submissions are flagged so they can be corrected and resubmitted.

PDF/A-3 Archiving

Archives each e-invoice as PDF/A-3 with the XML embedded, for long-term retention and audits.

E-Invoice Reconciliation and Reporting

Reports and dashboards help finance reconcile submitted, accepted and rejected e-invoices and monitor compliance status.

How Business Central Connects with ZATCA

From onboarding to record keeping, this is the invoice flow the integration follows.

Register the device

Devices are registered with ZATCA inside the app, so your system is onboarded before it submits invoices.

Create and post the invoice

Your team creates and posts sales invoices in Business Central, Dynamics NAV or LS Central as usual.

Generate the e-invoice

The posted invoice is converted into ZATCA-compliant XML with its QR code, using invoice and customer master data that has been checked for missing details.

Submit to ZATCA

The e-invoice is sent to ZATCA's FATOORA platform. Under ZATCA's rules, standard (B2B) invoices are cleared by ZATCA, and simplified (B2C) invoices are reported within 24 hours.

Handle the response

ZATCA's response is recorded against the invoice. Accepted invoices are marked as such; rejected or failed ones are flagged for review, corrected and resubmitted without leaving the ERP.

Archive and reconcile

Each e-invoice is archived as PDF/A-3 with its XML embedded, and dashboards and reconciliation reports show where every invoice stands.

Exact behavior depends on your ERP version, invoice types and customizations. We confirm the flow for your setup in a ZATCA assessment before you commit.

ZATCA Integration for Dynamics NAV

Many Saudi businesses still run Microsoft Dynamics NAV. The same ZATCA integration supports Dynamics NAV, so NAV users can generate ZATCA e-invoices and sync them to ZATCA without first moving to a new ERP.
If you are weighing a NAV upgrade at the same time, we can plan ZATCA onboarding together with a migration to Business Central.

Migration to Business Central

Business Central Implementation

ZATCA Integration for LS Central

LS Central is built on Business Central and widely used by retailers and hospitality businesses. The ZATCA integration supports LS Central and LS NAV, so stores and head office can send ZATCA e-invoices from the Dynamics system they already use.
Retail and point-of-sale setups differ a lot between customers. Send us your LS Central version and how your tills and back office are configured, and we will confirm how the integration fits.

Business Central Integration Services

Business Central Training and Support

Benefits of ZATCA Automation for Saudi Businesses

Why finance teams automate ZATCA e-invoicing inside the ERP.

Less manual invoice handling

Invoice generation, submission and archiving run from the ERP, which reduces rework and re-keying.

Clear visibility of rejections

Dashboards show accepted and rejected invoices, so problems are seen and fixed instead of sitting unnoticed.

Faster correction

Rejected or failed invoices are flagged for review and can be corrected and resubmitted inside the ERP.

An audit-ready archive

PDF/A-3 archives with embedded XML, plus reconciliation reports, support audits and long-term retention.

One system for your team

Your team keeps working in Business Central, Dynamics NAV or LS Central rather than learning a separate tool.

Which Saudi Businesses Need ZATCA Integration?

Phase 1 e-invoicing applies to VAT-registered taxpayers in the Kingdom. Phase 2 integration applies to the taxpayers ZATCA selects in each wave, so check your ZATCA notification or ask us to help you confirm your position. These businesses commonly need an integration on their ERP:

Distributors

High invoice volumes across customers and branches make manual submission impractical.

Wholesalers

Large B2B invoice runs need to reach ZATCA and be tracked invoice by invoice.

Retailers

Store and point-of-sale sales on LS Central or Business Central need to be handled consistently.

Manufacturers

Sales invoicing from production and stock should flow to ZATCA without separate exports.

Other VAT-registered businesses

Any VAT-registered company on a supported Dynamics platform that falls into a ZATCA wave.

What is ZATCA Phase 2?

Phase 2 is ZATCA's Integration Phase of e-invoicing in Saudi Arabia. Taxpayers connect their systems to ZATCA's FATOORA platform and issue signed XML e-invoices with a QR code. It started on 1 January 2023 and is introduced in waves, so the deadline for your business depends on the wave ZATCA places you in and the notification you receive.

What is the FATOORA platform?

FATOORA is ZATCA's e-invoicing platform. Under Phase 2, your ERP or e-invoicing solution connects to it to submit invoices and receive ZATCA's response.

How does Business Central integrate with ZATCA?

The D365 Zone app adds the ZATCA steps to Business Central. It registers devices, generates ZATCA-compliant XML invoices, syncs them to ZATCA, shows whether each invoice was accepted or rejected, and archives e-invoices as PDF/A-3.

Does the connector support XML invoice generation?

Yes. Invoices are generated as ZATCA-compliant XML for submission, and archived as PDF/A-3 with the XML embedded.

How are rejected invoices handled?

Rejected or failed submissions are flagged for review. They can be corrected and resubmitted without leaving Business Central, and dashboards and reconciliation reports show their status.

Does the integration support credit and debit notes?

ZATCA treats credit and debit notes as e-invoice documents, so they matter for Phase 2. How they are handled depends on how you issue returns and adjustments, so we confirm credit and debit note coverage for your setup during a demo or assessment, before you commit.

Is device registration supported?

Yes. Device registration with ZATCA is handled inside the app, so it does not need a separate manual process.

Which Business Central versions are compatible?

The integration supports Microsoft Dynamics 365 Business Central and is listed on Microsoft AppSource. Exact version and hosting requirements depend on your environment, so send us your version and we will confirm compatibility before you purchase.

Can Dynamics NAV and LS Central connect to ZATCA?

Yes. Besides Business Central, the integration supports Microsoft Dynamics NAV, LS Central and LS NAV. We confirm versions and customizations for your system during the assessment.

How can I request a ZATCA integration demo?

Use the form on this page. Tell us your ERP platform, company name and requirements, and a ZATCA integration specialist from our Dynamics 365 team will reply within one business day.

Dynamics 365 Zone

Microsoft Dynamics 365 Business Central implementation, integration, migration and support.

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