Case Study: Kaafmeem Zatca Phase 2 Integration with Magento2

With the enforcement of ZATCA Phase 2 in Saudi Arabia, it became mandatory for all e-commerce businesses, including those on Magento 2, to integrate their systems for real-time e-invoicing compliance. The system must comply with ZATCA’s technical requirements, including generating invoices in QR codes. For Kaafmeem, not having this integration in place meant facing potential penalties, legal issues, and operational disruptions. Without automated invoice reporting and digital stamping, the risk of manual errors and VAT mismanagement increased—making ZATCA integration not just a regulatory requirement but a critical business need.

Challenges

Complex Compliance Requirements: ZATCA Phase 2 involves complex e-invoicing rules like XML formatting, UUIDs, and QR codes, which needed precise implementation in Magento 2.
Real-time API Integration: Ensuring smooth, real-time communication between Magento and ZATCA’s Fatoora Portal without affecting site performance was a key challenge.
Safe Customization of Magento Core: Adding ZATCA features like digital signatures and QR codes without disrupting Magento’s upgrade path required careful coding.

Custom Magento 2 Enhancements for Kaafmeem

To ensure full ZATCA Phase 2 compliance, AAlogics implemented several critical customizations tailored to Kaafmeem’s unique business needs:

Store Credit Customization: Store credit usage was accurately reflected in invoices, ensuring compliance with ZATCA Phase 2 across all order scenarios.
Gift Cards Customization: Implemented correct VAT handling for gift card purchases and adjusted invoice formats to meet ZATCA requirements.
Reward Points Compatibility: Ensured accurate tax calculations when reward points were redeemed and reflected correct VAT values on invoices.
COD Rates Customization: Configured COD fees to be included in tax calculations and modified invoices to comply with ZATCA rules for COD payments.
Gift Wrapping Customization: Applied proper VAT logic to gift wrapping charges, ensuring correct tax treatment and ZATCA-compliant invoicing.

Solution

AAlogics successfully integrated ZATCA Phase 2 e-invoicing compliance into Kaafmeem’s Magento 2 store, ensuring full alignment with Saudi Arabia’s legal requirements including XML invoice generation, QR codes and real-time reporting. Without this integration, Kaafmeem risked heavy penalties from ZATCA, as compliance is mandatory for all online stores operating in the Saudi Kingdom. Our secure, scalable solution helped Kaafmeem avoid fines, maintain smooth operations and build customer trust all while staying fully compliant.

By partnering with AAlogics, Kaafmeem was able to:

Avoid ZATCA penalties.

Ensure business continuity.

Build trust through tax transparency.

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Our Approach

Integration: We integrated the ZATCA Phase 2 extension for real-time VAT reporting, tax calculations and e-invoicing, Followed by thorough testing to ensure accurate data synchronization and smooth functionality.

Go Live: After deploying the solution, We closely monitored system performance and provided ongoing support to address any issues and ensure continued ZATCA compliance.

Features Developed

ZATCA-Compliant E-Invoicing Integration: Seamless integration of Magento 2 with ZATCA Phase 2 requirements, including structured XML invoice generation.
Real-Time Invoice Validation & Submission: Implemented automatic validation and submission of invoices to ZATCA through secure APIs.
Digital Signature & QR Code Embedding: Each invoice includes a ZATCA-approved digital signature and a scannable QR code for verification.
Secure Invoice Archiving: Enabled encrypted storage of all e-invoices to ensure data integrity and compliance with retention policies.
Custom Business Logic for Magento: Store credit, gift card, reward points, COD, and gift wrapping workflows aligned with Saudi tax laws.

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AAlogics successfully delivered a seamless ZATCA Phase 2 integration for Kaafmeem, including real-time e-invoice generation, clearance with ZATCA, and QR code implementation — all fully aligned with FATOORA Phase 2 regulations.

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