Concept Definition
What is the clearance model for e-invoicing?
The clearance model is an e-invoicing compliance model in which an invoice must be submitted to and approved by the tax authority before it is legally valid and can be sent to the buyer. It is used in Saudi Arabia (ZATCA Phase 2), Turkey, and parts of Latin America. Clearance provides tax authorities with real-time transaction data.
How does clearance differ from the reporting model?
In the clearance model, the tax authority must approve the invoice before it reaches the buyer. In the reporting model, the invoice is sent to the buyer simultaneously with or before notification to the tax authority.
- Clearance: Tax authority in the transaction flow. Approval required before buyer receives invoice. Higher control.
- Reporting: Tax authority receives a copy of the invoice. Buyer can receive invoice without authority approval.
- Impact: Clearance creates potential delays if authority systems are slow. Reporting is faster but relies on after-the-fact compliance.
Frequently Asked Questions
- Which countries use the clearance model?
- Saudi Arabia (ZATCA Phase 2), Turkey (e-Invoice via GIB), Mexico (CFDI via SAT), Brazil (NF-e), and several other Latin American countries use clearance models. Italy's SdI system is closer to a reporting model with pre-clearance characteristics.
- How does clearance affect invoice timing?
- Under clearance, the invoice is not legally issued until the tax authority approves it. Any delay in the clearance system delays the supplier's ability to deliver the invoice to the buyer. Businesses must build retry logic and error handling into their clearance submission workflows.