E-invoicing for Dynamics 365: ZATCA Phase 2, the UAE and Oman

Across the region, tax authorities are replacing paper and PDF invoices with structured data that is checked, exchanged and reported through official channels. ZATCA states that a paper invoice converted by scanning is not an electronic invoice, and the UAE and Oman both specify XML. That moves the work into your ERP: Dynamics 365 has to produce complete, correctly coded invoice data, send it by the right route, store the responses and stop documents that fail validation.

The models differ. Saudi Arabia clears business invoices through ZATCA’s FATOORA platform before they reach the buyer. The UAE and Oman exchange invoices through accredited service providers in a five-corner model. A group that invoices in more than one of these countries needs one design that handles all of them, without duplicating master data or reworking every format by hand.

ZATCA, the Zakat, Tax and Customs Authority, introduced e-invoicing in two phases. Phase 1 (generation) has applied since 4 December 2021. Phase 2 (integration) has been rolled out in waves since 1 January 2023, and ZATCA notifies each wave at least six months before its integration date. Its Wave 25 announcement of 24 July 2026 covers taxpayers whose VAT-subject revenue exceeded SAR 187,500 in 2022, 2023, 2024 or 2025, and sets 1 February 2027 as their date for integration with the FATOORA platform.

In Phase 2, every tax invoice, usually issued business to business, must be cleared by ZATCA before it is shared with the buyer: FATOORA validates it and returns it with ZATCA’s cryptographic stamp and a QR code. Simplified tax invoices, usually issued to consumers, are reported within 24 hours of issue. Invoices are generated and stored as XML, or as PDF/A-3 with the XML embedded, and the e-invoicing solution must first be onboarded with ZATCA to obtain cryptographic stamp identifiers (CSIDs). These are the main ZATCA Phase 2 requirements your system must meet.

Microsoft lists Saudi Arabia as available in Dynamics 365 Finance: generation and direct submission to ZATCA of e-invoices for customer prepayments, sales and project invoices, credit notes and debit notes. It runs on the Electronic Invoicing service, configured in Globalization Studio, with clearance for tax invoices, reporting for simplified invoices and the returned QR code imported back into Finance.

• Dynamics 365 in Saudi Arabia (KSA)
• Dynamics 365 Finance & Operations

The UAE Ministry of Finance has set a phased timeline. Under Ministerial Decision No. 244 of 2025, as amended by Ministerial Decision No. 66 of 2026, businesses with revenue of AED 50 million or more had to appoint an Accredited Service Provider (ASP) by 30 October 2026 and must implement e-invoicing by 1 January 2027. Businesses below that threshold must appoint an ASP by 31 March 2027 and implement by 1 July 2027, and government entities by 31 March 2027 and 1 October 2027. The pilot started in July 2026, and business-to-consumer transactions stay outside the system until the Minister decides otherwise.

The UAE uses a five-corner model: the supplier, the supplier’s ASP, the buyer’s ASP, the buyer and the Federal Tax Authority (FTA). Invoices travel as XML under Peppol’s PINT AE specifications, carry no QR code, and the ASPs report the tax data. Microsoft lists UAE e-invoicing for Dynamics 365 Finance, in PINT format and sent to the Peppol network through a third-party “last mile” connection, as planned for 2026 release wave 2. Planned dates can change, so we confirm the feature status, your ASP’s connection options and your data readiness at the start.

• Dynamics 365 in the UAE

The Oman Tax Authority’s Fawtara programme also uses a five-corner model: suppliers and buyers exchange invoices through accredited service providers, who validate them and report tax data to the Authority, and XML is the mandatory format. The Authority set its first rollout, a pilot with selected large taxpayers, for August 2026. Its e-invoicing FAQ sets out when the mandate applies: from 1 April 2027 for taxpayers whose supplies exceed OMR 5,000,000, either for April 2026 to March 2027 or as expected for April 2027 to March 2028, and from 1 October 2027 otherwise. Microsoft lists Oman for Dynamics 365 Finance as planned for 2026 release wave 2 or later.

In Qatar, on 6 May 2026, the Council of Ministers approved a draft law on e-invoicing and its draft executive regulations, prepared by the Ministry of Finance in coordination with the General Tax Authority. When we checked on 4 November 2026, we found no published implementation dates. We follow the announcements and keep the invoice data in Dynamics 365 clean and structured, which is the groundwork any future requirement will build on.

• Dynamics 365 in Oman
• Dynamics 365 in Qatar

We treat e-invoicing as a finance process with a compliance date, not just a file format. A typical engagement covers:

• Readiness review: legal entities, invoice types, your Dynamics 365 version and the deadline that applies in each country.
• Master data clean-up: VAT and tax registration numbers, Arabic names and addresses, tax codes and units of measure.
• Configuration in Globalization Studio and Electronic reporting, including Arabic and English invoice layouts.
• Onboarding and connection: ZATCA CSIDs or your chosen service provider in the UAE or Oman.
• Testing of every scenario you use: tax and simplified invoices, credit and debit notes, prepayments and project invoices.
• Go-live support, a monitored submission log and ongoing support as rules change, through our managed services.

• Managed services for Dynamics 365

E-invoicing changes accounts payable too. In the UAE and Oman, your service provider receives suppliers’ e-invoices for you. Dynamics 365 Finance can import vendor e-invoices through the Electronic Invoicing service from email or SharePoint channels, but Microsoft lists no ready-made import for the UAE or Oman formats, so the import is configured for the format your provider delivers. Suppliers outside these networks will still send PDFs and paper, and Saudi suppliers share cleared invoices as XML or PDF/A-3. We design the intake so each format takes the right route: structured data where it exists, and invoice capture with AI-based recognition where it does not.

• Invoice capture and AP automation