A pharmacy issues hundreds of receipts a day, often across several branches, with a mix of VAT rates and insurance sales. That makes e-invoicing more demanding for you than for most retailers. Here’s what you need to know, and how to get ready without slowing your counter down.
What ZATCA e-invoicing is
The Zakat, Tax and Customs Authority (ZATCA) runs Saudi Arabia’s e-invoicing programme, known as Fatoora. It replaces paper and hand-typed invoices with structured electronic invoices that ZATCA can read, verify and match against your VAT returns. The goal is simple: make every sale traceable and cut tax evasion.
The programme has rolled out in two phases.
Phase 1: Generation
Since 4 December 2021, every VAT-registered business has had to generate and store invoices in a compliant electronic system. Handwritten invoices and documents typed up in a word processor no longer count. Simplified (B2C) invoices, the kind you hand to patients at the counter, must carry a QR code. Your software also has to stop invoices from being edited or deleted once they’re issued.
Phase 2: Integration
This is the phase that matters most for you today. Phase 2 connects your invoicing software directly to ZATCA’s platform. It started on 1 January 2023 and is rolling out in waves, grouped by revenue. ZATCA notifies each business at least six months before its wave. The latest, Wave 25, was announced in July 2026. It covers every business whose VAT-able revenue passed SAR 187,500 in any year from 2022 to 2025, with a deadline of 1 February 2027. That threshold brings most independent pharmacies into scope.
In Phase 2, every invoice is produced in XML (the UBL 2.1 standard) and carries a cryptographic stamp, a unique ID and a hash that chains it to the invoice before. From there, the route depends on who you’re selling to:
| Invoice type | Typical pharmacy use | What happens |
|---|---|---|
| Standard tax invoice (B2B) | Sales to insurers, companies and other pharmacies | Clearance: sent to ZATCA and approved before it’s given to the buyer |
| Simplified tax invoice (B2C) | Counter sales to patients | Reporting: given to the customer at once, then reported to ZATCA within 24 hours |
Credit and debit notes, such as for returns, follow the same rules as the invoice they adjust.
Before any of this can happen, each invoicing unit, whether a counter or a branch server, has to be onboarded with ZATCA. It receives a cryptographic stamp identifier (CSID) through the Fatoora portal.
Why pharmacies have it harder
We’ve worked with pharmacies for years, and we know e-invoicing hits your business in ways a generic retail system doesn’t always anticipate:
- Volume. Almost every sale you make is a simplified invoice, and every one has to be reported within 24 hours.
- Mixed VAT rates. Qualifying medicines and medical goods are zero-rated, while cosmetics and general retail items carry 15%. A single basket can hold both, and each line has to be invoiced correctly.
- Insurance sales. Your invoices to insurers are standard invoices, so they need clearance before they’re issued.
- Branches and offline counters. Every branch and device needs its own onboarding. And if the network drops on a busy evening, your counter has to keep selling and catch up on reporting once it’s back online.
- Returns. Refunds need a properly linked credit note, never a deleted sale.
Five steps to get ready for your wave
- Check the Fatoora portal or your ZATCA notification for your wave and deadline.
- Confirm your POS and accounting software are Phase 2 capable, not just Phase 1.
- Onboard every branch and invoicing device well before the deadline.
- Test standard and simplified invoices, credit notes and zero-rated items end to end.
- Make sure your staff know what to do if an invoice is rejected or a device goes offline.
ZATCA can issue warnings and fines for non-compliance, so leaving this to the final month is a real risk. The sooner your systems are ready, the calmer your deadline will be.
ZATCA-ready from day one with HSA
Here’s the good news: if you use HSA, the hard part is already done. Our pharmacy point of sale, EzPOS, and our warehouse and multi-branch inventory system, eInventory, are both integrated with ZATCA e-invoicing and ready to go.
EzPOS handles your simplified invoices right at the counter, including zero-rated and standard-rated items in the same sale, so your team keeps serving patients at the usual pace. eInventory handles the business side: standard tax invoices for companies and other pharmacies, cleared with ZATCA before they go out. And because eInventory is integrated with AMS, our accounting system, every invoice flows straight into your ledger and VAT records, so the numbers ZATCA sees always match your books.
And as with every regulatory change, ZATCA compliance comes to you in the normal release, at no extra cost. Book a demo and we’ll show you exactly how it works on a live counter.