E-invoicing in the UAE and Saudi Arabia: two systems, compared

Saudi Arabia introduced e-invoicing in December 2021, and the UAE's first businesses go live in January 2027. For companies active in both markets the vocabulary sounds the same, with XML files, e-invoices and providers on both sides, which makes it tempting to assume one solution will serve both. It will not.

How Saudi Arabia does it

• Phase 1, generation, has applied to all VAT taxpayers except non-residents since 4 December 2021.
• Phase 2, integration with ZATCA's FATOORA platform, has been rolled out in waves since 1 January 2023, each with at least six months' notice. Wave 25, announced on 24 July 2026, covers taxpayers whose VAT-able revenue passed SAR 187,500 in any year from 2022 to 2025, with a 1 February 2027 deadline.
• Standard tax invoices, mainly B2B, are cleared by FATOORA before reaching the buyer, which adds a cryptographic stamp and a QR code.
• Simplified invoices, mainly to consumers, are stamped by the seller's system, carry a QR code and are reported within 24 hours.
• The format is UBL 2.1 XML, delivered as XML or as a PDF/A-3 with the XML embedded.

How the UAE does it

• No clearance. A five-corner Peppol model moves the invoice from your accredited provider to your customer's provider and sends the tax data to the FTA at the same time.
• No QR code or cryptographic stamp. The provider assigns each invoice a unique identifier.
• The format is PINT AE, a Peppol specification that also uses UBL.
• Businesses with revenue of AED 50 million or more go live on 1 January 2027, and the rest on 1 July 2027. Consumer sales are excluded for now.

Where they differ

• Timing. A Saudi B2B invoice only becomes valid once cleared. A UAE e-invoice is validated by the providers and reported in transit.
• Scope. ZATCA's guideline says taxable persons not resident in Saudi Arabia do not have to issue e-invoices. The UAE covers anyone conducting business in the UAE, whether or not they are VAT registered.
• Identifiers. The UAE uses a 10-digit Tax Identification Number on Peppol, and Saudi Arabia uses the VAT number on FATOORA.
• Infrastructure. A Saudi entity needs a FATOORA-onboarded solution with ZATCA-issued device certificates. A UAE entity needs an accredited service provider. One does not replace the other.

Selling to Saudi Arabia from the UAE

A UAE company invoicing a Saudi customer from the UAE does not issue a ZATCA e-invoice, as it is not resident in Saudi Arabia. In the UAE it issues a PINT AE export e-invoice with the export flag and the placeholder address 0235:9900000099, zero-rated if the export tests are met. The UAE does not currently treat Saudi Arabia as an implementing state under the GCC VAT agreement, so a Saudi customer counts as any other foreign customer. According to vendor guides, the Saudi buyer usually accounts for Saudi VAT under the reverse charge, but we could not verify that against ZATCA's text, so confirm it with a Saudi adviser.

Running entities in both

• Maintain two registrations and two systems: FATOORA integration in Saudi Arabia and an accredited provider in the UAE.
• Keep customer data per country, as a Saudi VAT number on Saudi invoices and an export placeholder on UAE ones.
• Track both timetables. Wave 25 falls due on 1 February 2027, one month after the UAE's first go-live.

Penalties on each side

• Saudi Arabia: under ZATCA's 2021 announcement, fines start at SAR 5,000 for not issuing e-invoices and SAR 10,000 for deleting or amending them, increasing for repeat violations.
• UAE: AED 100 per e-invoice not issued on time, capped at AED 5,000 a month, and AED 5,000 a month for not implementing the system.

If your business trades on both sides of the border and you want help planning the two set-ups, ALXO would be glad to talk.