When the second phase of e-invoicing in Saudi Arabia took effect, business-to-business (B2B) tax invoices are no longer delivered to the buyer directly. They now pass first through the Zakat, Tax and Customs Authority (ZATCA) via the Fatoora platform, which clears them before they reach the customer’s hands. This process is called Clearance, and it is the focus of this guide.
Clearance is the mandatory track for tax invoices between businesses in the second phase. It differs fundamentally from the Reporting track dedicated to consumer invoices (B2C). In this guide we focus on the Clearance track alone: what it is, why it happens before delivery, how it works technically, and what happens if it fails. We refer to the Reporting track only for comparison, and point you to its detailed guide for the specifics.
A note on terminology: throughout this guide we use «al-Musadaqah» as the Arabic equivalent of Clearance because it is closest to the regulatory meaning, that is, the Authority’s approval of the invoice before it is delivered. You will sometimes find the same concept referred to as «al-Muqasah» in some references, and the intent is the same.
What is Clearance in e-invoicing?
Clearance is a procedure in which the Zakat, Tax and Customs Authority approves the tax invoice at the moment it is issued, before the seller sends it to the buyer. In simpler terms: the invoice is sent to the Fatoora platform first, the Authority inspects it, then returns it signed and approved, and only then is the seller entitled to deliver it to the customer.
This sequence inverts the traditional logic of invoicing. Previously, the seller would issue the invoice and deliver it immediately, then report it to the tax authority later when filing the return. With Clearance, the Authority’s approval became a prerequisite for the invoice’s validity, not a subsequent step. An unapproved invoice is not a legal invoice that can be relied upon.
To picture it, imagine Clearance as a mandatory checkpoint on the invoice’s journey. The invoice does not complete its trip to the buyer until it passes inspection and carries the transit stamp. This stamp is not merely formal; it is what turns an ordinary data file into a tax document recognized by both the Authority and the buyer. And because the inspection happens at the moment of issuance, the error is caught while you are still able to correct it, not after it is too late.
Clearance applies to one specific type of document: the tax invoice between businesses (B2B), as well as sales to government entities, along with their associated credit and debit notes. The tax invoice simplified type aimed at the end consumer follows an entirely different track.
Why does Clearance happen before delivery and not after?
The core idea in Clearance is that it is a real-time, prior control rather than a subsequent one. The Zakat, Tax and Customs Authority wanted to verify the soundness of the invoice as it is created, not months later at the return. This achieves three direct objectives.
First, ensuring that every invoice between businesses exists in the Authority’s records before it circulates in the market. There is no legal B2B invoice outside the system. Second, closing the door on fictitious or retroactively altered invoices, because approval precedes delivery and is sealed with an encrypted stamp that cannot be tampered with. Third, unifying the tax data between seller, buyer, and Authority from the very first moment, so no discrepancies appear at reconciliation.
The practical difference is clear: in the old value-added tax track, the error was caught at review. Now, an invoice that violates the specification may be rejected at the moment of issuance, so it never reaches the buyer at all. This pushes businesses toward accuracy from the start instead of late correction.
| Criterion | Clearance | Reporting |
|---|---|---|
| Type | B2B tax invoice | B2C simplified invoice |
| Timing | Approval before delivering the invoice | Reporting within 24 hours after delivery |
| Condition | Not delivered before the Authority’s approval | Delivered immediately, then reported |
When is Clearance applied? Its timeline and mandatory scope
Clearance is part of the second phase (Integration and Linking) that began on 2023-01-01 in waves according to annual taxable revenue. Each wave is notified at least 6 months before its mandatory date. And as the waves reached the mandatory VAT registration threshold (SAR 375,000), nearly every VAT-registered business came within the scope of the second phase.
In practice, if you issue tax invoices to other businesses or to government entities and you are within an activated wave, you are obligated to follow the Clearance track for every invoice of this type. There is no minimum invoice value that exempts it: the criterion is the invoice type (B2B) and the business’s status within the second phase, not the invoice amount.
To understand the full second-phase requirements (format, encrypted stamp, QR code, invoice sequencing), see our detailed guide on the requirements of the second phase of e-invoicing. This present guide assumes you know those requirements, and focuses specifically on the Clearance mechanism.
How does Clearance work technically, step by step?
Clearance is not merely «sending» the invoice. It is a controlled technical dialogue between your invoicing system and the Fatoora platform, taking place in fractions of a second. Here is the path as it actually happens.
1. Generating the invoice in the approved format
Your system creates the invoice in an XML format compliant with the UBL 2.1 standard. To it are added a unique invoice identifier (UUID), a sequential counter (ICV), and a hash value of the previous invoice to link the invoices in an unbroken chain. This chain prevents any invoice from being deleted or another inserted without the trace showing.
2. The encrypted stamp with the digital certificate
The XML is signed with an encrypted stamp using the Cryptographic Stamp Identifier (CSID) issued by the Authority for that specific device or branch. The stamp proves the issuer’s identity and ensures the invoice content was not altered after signing. Each device or branch has its own CSID.
3. Sending to the Fatoora platform via the Clearance interface
Your system sends the signed invoice to the Clearance API on the Fatoora platform, over a secured connection based on OAuth 2.0. This interface is dedicated to B2B invoices alone, and differs from the Reporting interface dedicated to consumer invoices.
4. The Authority’s inspection and returning the invoice approved
The Fatoora platform inspects the invoice automatically against the specification’s rules: the validity of mandatory fields, the validity of tax numbers, the consistency of calculations, the soundness of the stamp. If it succeeds, the Authority returns an approved XML copy sealed with its own stamp, accompanied by the approved QR code. At that point the invoice becomes legal and deliverable.
5. Delivering the approved invoice to the buyer
After the invoice returns approved, your system generates the presentation copy for the buyer, usually in PDF/A-3 format with the approved XML file embedded within it. This copy is the one delivered to the customer and kept in the records. Delivering the invoice before its approval violates the regulation.
Create a UBL 2.1 file
Apply the stamp with the CSID certificate
Send it to the Clearance API
The Authority approves and adds the QR code
Deliver the approved invoice (PDF/A-3)
What does it mean for an invoice to be «Cleared»?
A cleared invoice is an invoice that has passed through the Clearance track and returned signed with the stamp of the Zakat, Tax and Customs Authority. The Authority’s stamp is the proof that the invoice entered its official records and that its data matched the specification at the moment of issuance.
The difference between a cleared invoice and an uncleared one is not formal. An uncleared invoice is not considered a valid tax document, the buyer is not entitled to recover input tax based on it, and the seller may not rely on it in their return. That is why the QR code on the cleared invoice carries the stamp and signature data, allowing any party to verify its validity.
This point distinguishes Clearance from Reporting sharply. In Reporting, the invoice becomes valid for delivery as soon as it is issued and is then reported later. In Clearance, however, the validity itself is contingent on the Authority’s prior approval. No approval, no invoice.
The approved copy has both legal and accounting value. Legally, it is the document that proves the transaction before the Authority and at any subsequent audit. Accounting-wise, it is the voucher on which both parties build their entries: the seller records the revenue and the tax due, and the buyer records the expense and the recoverable input tax. Any flaw in this copy carries its effect into both parties’ books, which is why the invoicing system takes care to keep the approved copy with its stamp in full, not merely a presentation image of the invoice.
Does Clearance differ between company invoices and government invoices?
Both are subject to the same Clearance track, because the criterion is that the buyer is a business or an entity, not an individual consumer. An invoice directed to a government entity is treated as a tax invoice between businesses in terms of the requirement for prior approval. The differences, if any, lie in additional data that the government transaction may require (such as a purchase order reference), not in the principle of Clearance itself. That is, the requirement for approval before delivery is fixed in both cases.
What happens if Clearance fails?
The Fatoora platform may return the invoice in two different statuses, and it is important to distinguish between them because your action differs in each case.
Rejection
With a rejection, the invoice violates a fundamental rule in the specification (an error in a tax number, a missing mandatory field, an unsound stamp). A rejected invoice is not approved and may not be delivered to the buyer at all. You must correct the error in your system, then resend the invoice for Clearance again.
Warning
With a warning, the Authority approves the invoice but flags a note that does not rise to the level of rejection. Here the invoice becomes valid and can be delivered, but it is advisable to address the cause of the warning in future invoices so it does not turn into an error later.
Among the most common causes of both rejection and warning are identification numbers entered in the wrong format: the commercial registration number, the tax number, the ID number. Accuracy in these fields from the start shortens cycles of rejection and resending. And the more your invoicing system verifies the format of these numbers before sending, the lower the odds of the invoice being returned.
Other recurring causes of rejection deserve attention. Among them is the inconsistency of tax totals with line item values, that is, the calculated tax total does not match the tax rates on the lines. Among them is the use of an exemption code or a zero-rate code without stating its regulatory reason when required. Among them is a flaw in the invoice sequence or in the hash value of the previous invoice, which breaks the linking chain. And finally, an invalid encrypted stamp if the CSID has expired or was not renewed for the branch. Each of these causes is addressed at its source within the system, not in the rejected invoice alone.
The practical rule here: treat the root, not the symptom. An invoice rejected because of a wrong tax number in the customer’s file will recur with every invoice for this customer until you correct the file itself. Correcting the single invoice and resending it solves only the current case, whereas correcting the customer’s data prevents the problem from recurring.
| Outcome | Action |
|---|---|
| Approval | The invoice is valid and delivered to the buyer |
| Warning | Approved with notes to be corrected later |
| Rejection | Not approved; must be corrected and resent |
Clearance versus Reporting: when is each track used?
Confusing the two tracks is the most common misunderstanding in the second phase. The decisive rule is simple: the buyer type determines the track.
| Aspect | Clearance | Reporting |
|---|---|---|
| Invoice type | B2B and government tax invoice | B2C simplified tax invoice |
| Timing of dealing with the Authority | Before delivering to the buyer | After delivery, within 24 hours |
| The invoice’s validity for delivery | Contingent on the Authority’s approval | Valid upon issuance |
| The API interface | Clearance API | Reporting API |
Note that a single business may use both tracks together. A store that sells to businesses wholesale and to consumers at retail issues Clearance invoices for its corporate customers, and Reporting invoices for its individual customers. The accounting system is what routes each invoice to its correct track automatically.
To dive deeper into the Reporting track alone (the 24-hour window, consumer invoices, the simplified QR code), see our guide on Reporting in e-invoicing within the e-invoicing compliance cluster. And to understand the full picture, this cluster brings together the second-phase guides in one place.
Clearance for credit and debit notes
Clearance does not concern the original invoice alone. Every subsequent amendment to an approved B2B invoice passes through the same track. So if you issue a credit note to cancel part of an invoice or return goods, or a debit note to add a fee that was not accounted for, this note must be approved by the Authority before it is delivered to the buyer, exactly like the original invoice.
The reason is that the note amends an existing tax effect. The credit note reduces the tax due, and the debit note increases it. If they were allowed to be issued outside Clearance, the door would open to manipulating the tax value after the original invoice was approved. That is why the system links every note to its parent invoice via its identifier, so the chain stays connected and consistent in the Authority’s records.
In practice, this means that any correction to a business invoice is not an internal procedure, but a new approval process. A good accounting system treats the note as an independent document that passes through the full Clearance track, while preserving its link to the original invoice, so you do not have to link manually.
What if the connection drops during Clearance?
A question many accountants ask: as long as Clearance requires a live connection to the Fatoora platform, what happens if the connection is unavailable at the moment of issuance? Here the fundamental difference between the Clearance and Reporting tracks in handling an outage appears.
In consumer invoices (Reporting), the invoice can be issued and delivered immediately, then the Authority is notified when the connection returns within the window. In business invoices (Clearance), however, the matter is more precise, because approval is a prerequisite for delivery. A B2B invoice that has not yet been approved cannot be delivered. When the connection is unavailable, the invoice remains pending in your system awaiting completion of Clearance as soon as the service returns, and is not delivered to the buyer before that.
This makes connection stability and the reliability of the invoicing system decisive factors in the operation of high-invoice-volume businesses. The more the system manages the list of pending invoices and automatically retries Clearance when the connection returns, the lower the operational impact of the outage, and the less manual accountant intervention.
The impact of Clearance on the accountant’s daily work
Clearance changes the rhythm of accounting work more than it appears. The invoice is no longer an internal document issued with the press of a button; it has become a process that requires a live connection to the Authority at the moment of issuance. This imposes three practical changes.
First, relying on an invoicing system always connected to the Fatoora platform, not on manual spreadsheets or files. The invoice between businesses is not completed without this connection. Second, discipline in customer data: tax numbers and registration numbers must be correct and up to date, because an error in them means the invoice is rejected, not merely an internal note. Third, following up on rejection and warning cases and addressing them quickly, because a rejected invoice means a sale that was not legally completed.
Here the role of a strong accounting system appears. The more the system handles generating the XML, the stamping, the sending, and the receiving automatically, the more the accountant is freed to focus on the core of their work instead of being occupied with the technical details of every invoice.
There is another impact many overlook: Clearance improves the quality of customer data over time. Because the invoice may be rejected if the customer’s tax number is wrong, the business is compelled to verify and update the data of its corporate customers. The result is a cleaner, more accurate customer base that serves tax reconciliation and collection later. What seemed a regulatory burden turns into useful discipline in the records.
Clearance is also reflected in the timing of revenue recognition. Since the invoice is not considered legal before its approval, the accountant now ties recognition of the sale to the completion of Clearance rather than merely to writing the invoice. This imposes greater attention to the status of each invoice (approved, pending, rejected) at the close of the accounting period, so that an invoice that has not completed its legal cycle is not counted.
How does Qoyod help you in the Clearance track?
Qoyod is an accounting program ready for the second phase of e-invoicing, handling the full Clearance track on your behalf without manual technical intervention. Here is specifically what it offers for B2B invoices subject to Clearance.
- Generating XML in UBL 2.1 format with the unique identifier (UUID), the sequential counter, and the hash value to link the invoices in a connected chain, automatically with every invoice.
- The encrypted stamp and CSID management for each branch or device, signing every invoice before sending it to the Authority.
- Instant sending to the Fatoora platform via the Clearance interface and receiving the approved copy and the approved QR code automatically.
- A PDF/A-3 copy with embedded XML for sales invoices and debit notes, delivering the customer a single file compliant with the second-phase presentation requirement (launched on 2026-05-24 for second-phase customers, while keeping an independent XML download button).
- Instant verification of the format of identification numbers (commercial registration, tax number, ID numbers) upon entry in the business settings and in customer files and invoices, catching one of the most common causes of warnings before sending (launched on 2026-05-20).
- Automatic distinction between the Clearance track and the Reporting track according to the invoice type, so business invoices go to Clearance and consumer invoices go to Reporting without manual selection.
To review the full technical integration with the Authority, see the page Qoyod’s integration with the Zakat, Tax and Customs Authority, and the page Qoyod’s readiness for the second phase. And technical support remains available 24 hours, seven days a week, to help you on your journey of linking with the Fatoora platform.
Common mistakes about Clearance to avoid
Many businesses stumble in the early stage of applying Clearance because of mistaken concepts. Here are the most prominent.
The first concept: «I can deliver the invoice then approve it later.» Wrong. In the Clearance track, approval is a prerequisite for delivery, not a subsequent step. The order is not reversible. The second concept: «Clearance and Reporting are the same thing.» Wrong. Each track has a different interface, timing, and rules, and confusing them leads to invoices in the wrong track. The third concept: «The accounting system verifies the invoice on the Authority’s behalf.» Inaccurate. The system relays what you enter, and the Authority is the party that approves or rejects. A good system verifies the format of the numbers before sending, but it does not replace the Authority’s full inspection.
The fourth concept: «The wave has not included me yet, so there is no need to prepare.» With the waves reaching the SAR 375,000 threshold, the scope now practically includes every business registered for value-added tax. Preparing early spares you stumbling later. For more on the full system, see the e-invoicing learning center andthe accounting program from Qoyod, and learn about the role of the Zakat, Tax and Customs Authority in the system.
Clear your business invoices with the Authority in a single click
Qoyod handles generating the invoice, stamping it, sending it to the Fatoora platform, and receiving it approved, so it reaches your customer ready without any manual technical step from you.
Frequently asked questions about Clearance
What is the difference between Clearance and Reporting in e-invoicing?
Clearance is for business invoices (B2B) and happens before delivery to the buyer, as the Authority approves the invoice first. Reporting is for consumer invoices (B2C) and happens after delivery within 24 hours. The buyer type is what determines the track.
Can a tax invoice be delivered before the Authority approves it?
No. In the Clearance track, the approval of the Zakat, Tax and Customs Authority is a prerequisite for the invoice’s validity. An unapproved invoice is not a valid tax document for delivery or for recovering input tax.
What do I do if the Fatoora platform rejects my invoice?
Correct the error indicated by the rejection message (a wrong tax number, a missing field, an unsound stamp), then resend the invoice for Clearance again. A rejected invoice may not be delivered to the buyer.
What is the difference between rejection and warning in Clearance?
Rejection means the invoice was not approved and must be corrected and resent. Warning means the invoice was approved with a note, so it can be delivered, but it is advisable to address the cause of the warning in future invoices.
Do I need a separate CSID for each branch?
Yes. Each device or branch needs its own Cryptographic Stamp Identifier (CSID), issued by the Authority via the Fatoora platform, to sign its invoices before sending them for Clearance.
Does Qoyod handle the Clearance track automatically?
Yes. Qoyod generates the XML in UBL 2.1 format, stamps it with the CSID, sends it to the Fatoora platform via the Clearance interface, receives the approved copy, then generates a PDF/A-3 copy ready for delivery, all automatically.
