Introduction
Staying compliant with the Zakat, Tax, and Customs Authority (ZATCA) regulations is crucial for e-commerce success. For Magento store owners in Saudi Arabia, ZATCA Phase 2 compliance, effective January 1, 2023, is mandatory. This phase requires companies to adopt compliant e-invoicing solutions. In this article, we’ll explain what ZATCA Phase 2 compliance is, why it matters, and how Magento store owners can ensure their stores are fully compliant, plus introduce a solution to simplify the process.
What is ZATCA Phase 2 Compliance?
 ZATCA Phase 2, also known as the Integration Phase, requires businesses to integrate their invoicing systems with ZATCA’s Fatoora platform. This phase builds on the foundation laid by Phase 1 (Generation Phase), which mandated the generation of e-invoices in a specific format.
Under Phase 2
- Generate e-invoices in XML or PDF/A-3 format with embedded XML.
- Transmit invoices to ZATCA’s platform in real-time.
- Receive a unique Cryptographic Stamp Identifier (CSID) for each invoice.
- Include a QR code on each invoice for verification purposes.
Failure to comply with these regulations can result in penalties, fines, or even suspension of business operations. For Magento store owners, this means ensuring your e-commerce platform is equipped to handle these requirements seamlessly.
Why is ZATCA Phase 2 Compliance Important for Magento Store Owners?
Legal Obligation: Compliance with ZATCA regulations is not optional. It’s a legal requirement for all businesses operating in Saudi Arabia, including e-commerce stores.
Avoid Penalties: Non-compliance can lead to hefty fines, which can significantly impact your business’s bottom line.
Build Trust: Compliant invoicing enhances your credibility with customers and government authorities.
Streamline Operations: Automated e-invoicing reduces manual errors and improves efficiency in your billing processes.
Key Features of ZATCA Phase 2 Compliance for Magento Stores
To meet ZATCA Phase 2 requirements, your Magento store must support the following features:
Real-Time Invoice Generation: Invoices must be generated in real-time and transmitted to ZATCA’s platform.
XML Format: Invoices must be generated in XML format or PDF/A-3 with embedded XML.
QR Code Integration: Each invoice must include a QR code for easy verification.
CSID Integration: A unique Cryptographic Stamp Identifier must be generated for each invoice.
Secure Data Transmission: Invoices must be securely transmitted to ZATCA’s platform using APIs.
Introducing the ZATCA E-Invoicing Phase 2 Magento Extension by AAlogics
To simplify the compliance process, AAlogics offers a powerful ZATCA E-Invoicing Phase 2 Magento Extension. This extension is specifically designed to help Magento store owners meet all ZATCA Phase 2 requirements effortlessly.
Key Features of the Extension:
Real-Time Invoice Generation: Automatically generates invoices in XML or PDF/A-3 format.
QR Code Integration: Adds a QR code to each invoice for easy verification.
CSID Generation: Generates a unique Cryptographic Stamp Identifier for every invoice.
Secure API Integration: Ensures secure transmission of invoices to ZATCA’s platform.
User-Friendly Interface: Easy to install and configure, even for non-technical users.
Client Feedback
Another beautifuly-made plugin by AA Logics that saved us tons of time and money going with third-party application approved by Zatca. Ali and the developers took the time to customize the plugin to our business needs with quality work! thank you so much for your amazing support, as always!
Stay ZATCA Compliant with Ease! Get the ZATCA E-Invoicing Phase 2 Magento Extension Today!
Benefits of ZATCA Phase 2 E-Invoincing Magento Extension
Ensures Compliance: Meets all ZATCA Phase 2 requirements, reducing the risk of non-compliance penalties.
Enhances Efficiency: Automates invoicing processes, allowing you to focus on core business activities.
Improves Accuracy: Minimizes manual data entry errors, ensuring accurate financial records.
Don’t Risk Non-Compliance! Upgrade Your Magento Store with the ZATCA E-Invoicing Phase 2 Extension!
Conclusion
ZATCA Phase 2 compliance is mandatory for Magento store owners in Saudi Arabia. By understanding the requirements and using specialized tools like the ZATCA E-Invoicing Phase 2 Magento Extension, you can ensure seamless compliance and focus on growing your business.
Take action today! Ensure your store meets ZATCA Phase 2 requirements effortlessly.  Â
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Frequently Asked Questions
What is ZATCA Phase 2 and why must my Magento store comply?
Phase 2 is the ZATCA integration phase requiring real-time e-invoice reporting and approved formats. Phase 2 (Integration) requires businesses to generate, sign and integrate e-invoices with ZATCA using approved formats and reporting flows. Magento stores selling in Saudi must follow these rules to keep invoices legally valid and avoid enforcement.
Who falls into Phase 2 waves and what thresholds apply?
ZATCA rolled Phase 2 out by taxpayer group; thresholds are based on SAR turnover and waves. Phase 2 rollout uses waves targeting taxpayers by taxable turnover (e.g., SAR5m+ for certain waves) and sector. ZATCA publishes which taxpayers must integrate in each wave — check your wave and deadlines to plan Magento changes.
What technical invoice format does Phase 2 require — UBL, XML, or both?
Phase 2 mandates UBL 2.1-based invoices delivered in XML with required ZATCA tags. Under Phase 2, invoices must be generated in UBL 2.1 XML structure and include ZATCA’s mandatory elements (unique IDs, cryptographic stamp, TLV QR when applicable). Magento must export compliant UBL XML for clearance.
Do I need to sign or stamp XML invoices before sending them to ZATCA?
Yes — Phase 2 requires cryptographic stamping/signature and approved identifiers before reporting. Phase 2 requires invoices to include a cryptographic seal (stamping) and unique identifiers; approved solution providers help apply the CSID and QR/TLV encoding. Magento stores need an integration that performs stamping prior to ZATCA submission.
What are the penalties for non-compliance with Phase 2 for e-invoicing?
ZATCA may impose fines, including SAR5,000–SAR10,000 (or higher) for certain violations. Non-compliance risks fines (e.g., failure to issue/store e-invoices, missing QR, or modifying approved invoices) and possible audits. Penalty amounts vary by violation and recurrence, so timely Magento integration is essential.
How do I integrate ZATCA Phase 2 with Magento — what are the implementation steps?
(voice lead): Typical steps: assess scope, map invoice fields to UBL, implement XML export, sandbox, certify, then go live.Â
(text snippet): Implementation includes: audit invoice data, map Magento fields to UBL XML, add unique IDs and stamping, connect to ZATCA sandbox for testing, get Phase 2 qualification or use a certified provider, then deploy to production.
Can I use a Phase 2 certified solution provider, or must I build in-house?
You can use a ZATCA-qualified solution provider or develop an in-house, ZATCA-compliant integration. ZATCA lists indicative Phase 2 certified solution providers; taxpayers can either use these qualified providers or certify their in-house EGS (electronic solution). Using a certified provider often speeds compliance for Magento stores.
What testing and sandbox steps are required before production clearance?
You must validate UBL XML, sign/stamp in the sandbox, pass ZATCA validation, then request production access. ZATCA requires sandbox testing: generate UBL XML from Magento, apply cryptographic stamp and QR, submit to the sandbox for schema and business validations, and only after passing move to production. Keep test logs for audit readiness.
How should Magento handle simplified (B2C) invoices, QR codes, and storage?
Simplified B2C invoices must include the TLV QR and be stored electronically per ZATCA rules. For B2C, Phase 2 requires simplified tax invoices with the TLV-encoded QR (9 TLV tags) and immediate presentation to buyers. Magento must generate and store both simplified and full e-invoices electronically per retention rules.
Where can I find official Phase 2 docs and AAlogics examples for Magento?
Find ZATCA official guidelines, the Solution Providers directory, and relevant case studies online. Use ZATCA’s official E-Invoicing guidance and Solution Providers directory for Phase 2 rules and certification steps. For practical Magento examples and a case study, review AAlogics’ Phase 2 Magento integration to see a working implementation.
