ZATCA e-invoicing for contractors from progress claim to cleared invoice
IntellaQ Flow generates ZATCA Phase-2 compliant e-invoices straight from your progress claims, interim payment certificates and subcontract certificates — not from a separate accounting bolt-on. Standard (B2B) invoices are cleared with the Fatoora platform before you issue them; simplified (B2C) invoices are reported within 24 hours, and both carry the cryptographic stamp, invoice hash and QR code. Retention, advance recovery, variations and credit notes are applied with the correct VAT timing, so a single milestone bill stays compliant end to end.
Compliant invoices from the way you already bill
Every ZATCA rule that trips up contractors — clearance routing, retention VAT, advances and credit notes — handled inside the billing engine.
Clearance vs reporting, routed for you
Standard tax invoices (B2B) — your bills to owners, main contractors and businesses — are cleared with ZATCA's Fatoora platform before you issue them. Simplified invoices (B2C) are reported within 24 hours. Flow decides the correct path per invoice and submits it automatically.
- Standard / B2B cleared pre-issue
- Simplified / B2C reported within 24h
- UBL 2.1 XML generated per invoice
Invoices from your IPC, not re-keyed
Progress claims and interim payment certificates become ZATCA invoices in one step — line items, percentage complete and prior billing carry through, so the certificate and the tax invoice always agree.
- Percentage-complete billing
- Prior-billed & this-period lines
- Linked to project & cost codes
Retention VAT deferred to release
VAT on retained amounts (ضمان أعمال) is held and only recognised when the retention is released and invoiced — matching ZATCA's treatment — so you don't account for output VAT on cash you haven't yet collected.
- Retention held per certificate
- VAT recognised on release
- Retention release notes supported
Advance payment & recovery timing
Mobilisation advances raise a ZATCA advance-payment invoice when the advance is received, then recovery is netted against each progress claim with the VAT reversed proportionally — no double-counting across the job.
- Advance invoice on receipt
- Recovery netted per claim
- Correct VAT on every milestone
Credit & debit notes that reconcile
Variations, back-charges, disallowed quantities and retention release generate ZATCA credit or debit notes tied to the original invoice, with reason codes and the reference chain preserved so the account stays reconciled and audit-ready.
- Linked to the original invoice
- Reason codes captured
- Balance stays reconciled
Cryptographic stamp & QR on every invoice
Each invoice is signed with your ZATCA cryptographic stamp identity and carries the TLV QR code and invoice hash chain (PIH), so a scanned invoice validates against Fatoora and the sequence can't be broken.
- XAdES signature + invoice hash
- TLV QR code (Phase-2)
- PIH chain & ICV counter
One compliant record, from bid to final account
Avoid ZATCA penalties
Failures such as an invoice not issued in the required format, a missing QR code or cryptographic stamp, or late clearance/reporting can draw fines of up to SAR 50,000 per violation and escalate on repeat. Flow enforces the mandatory fields, signing and submission timing so invoices leave the system compliant.
Arabic & Hijri, hosted in-Kingdom
Invoices are bilingual Arabic/English with Hijri dates where needed and generated on in-Kingdom hosting — so there's no cross-border question over your tax records.
One source from cost to invoice
Billing, job costing, subcontracts and finance sit in the same core, so every ZATCA invoice ties back to a cost code, a certificate and a ledger entry — one audit trail, not three systems to reconcile.
Subcontractor certificates too
Subcontractor payment certificates follow the same clearance, retention and advance-recovery rules, so your payables are as compliant as your receivables.
Related: Progress billing & IPC · ZATCA Phase-2 e-invoicing: ERP requirements · Construction ERP in Saudi Arabia
From progress claim to cleared invoice
Certify the work
Approve the IPC or progress claim — quantities, percentage complete, retention held and advance recovery are calculated on the certificate.
Generate the invoice
Flow builds the ZATCA UBL 2.1 invoice from the certificate, applies the VAT treatment for retention and advances, and attaches your cryptographic stamp.
Clear or report
Standard / B2B invoices are cleared with Fatoora before issue; simplified / B2C invoices are reported within 24 hours — each with QR code and hash chain.
Issue & reconcile
The cleared invoice, its QR and PIH are stored against the project and posted to finance, keeping the certificate, tax invoice and ledger in agreement.
ZATCA e-invoicing for contractors: FAQs
What's the difference between clearance and reporting for a contractor's invoices?
Clearance applies to standard tax invoices (B2B) — typically your invoices to project owners, main contractors and other businesses. These must be sent to ZATCA's Fatoora platform and cleared before you issue them to the client. Reporting applies to simplified invoices (B2C) and must be submitted to ZATCA within 24 hours of issue. IntellaQ Flow decides the correct route per invoice and handles the submission for you.
How does ZATCA e-invoicing handle VAT on retention?
Retention (ضمان أعمال) is money held back from each progress claim until defined milestones are met. IntellaQ Flow defers the VAT on the retained portion and only recognises it when the retention is released and invoiced, rather than charging output VAT on cash you haven't yet collected. When retention is released, a compliant invoice or note recognises the VAT at that point and keeps the reference chain intact.
How is VAT treated on advance payments and their recovery?
When you receive a mobilisation advance, VAT is due at the point the advance is received, so Flow raises a ZATCA advance-payment invoice then. As you bill progress, the advance is recovered by netting it against each claim and the associated VAT is reversed proportionally — so you never account for the same VAT twice across the life of the contract.
Can it issue ZATCA credit notes for variations and rejected quantities?
Yes. Variations, back-charges, disallowed quantities and retention release are all handled as ZATCA-compliant credit or debit notes linked to the original invoice, with reason codes and the reference chain preserved, so the account stays reconciled and audit-ready.
What are the penalties for non-compliant e-invoices in Saudi Arabia?
ZATCA can impose fines for failures such as not issuing an e-invoice in the required format, omitting the QR code or cryptographic stamp, or not clearing or reporting on time — reaching up to SAR 50,000 per violation and escalating for repeat breaches. IntellaQ Flow enforces the mandatory fields, signing and submission timing so invoices leave the system compliant.
Do we still need a separate ZATCA solution if we use IntellaQ Flow?
No. ZATCA Phase-2 e-invoicing is built into the billing engine — the UBL 2.1 XML, cryptographic stamp, invoice hash chain (PIH), TLV QR code and clearance/reporting submission are all generated from the same certificates you already raise. You don't bolt separate e-invoicing middleware onto your ERP.
Make every progress claim ZATCA-compliant
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