Bookkeeping Requirements for Companies in Saudi Arabia

The bookkeeping requirements for companies in Saudi Arabia come from three places: the commercial books law, the VAT rules, and the annual Zakat and corporate income tax return. A new Saudi company, including one owned by an Indian parent, should plan for all three in its first month. This guide explains what each one asks for, which dates the Zakat, Tax and Customs Authority (ZATCA) has published, and which points only a Saudi tax adviser can confirm. VAT registration has its own topic, VAT registration for foreign companies, so we do not repeat it here.

Key takeaways

There are three sets of rules, and they use different record-keeping periods. Sources point to 6 years for VAT records and 10 years for commercial and Zakat records (verify).

The VAT rate is 15%, in force since 1 July 2020, according to ZATCA.

E-invoicing Phase 1 applies to all resident taxpayers. Whether a newly registered company must follow Phase 2 from its first invoice is not confirmed. It depends on the wave ZATCA assigns.

Zakat and corporate income tax returns are due within 120 days of the end of the year.

Name a Saudi tax adviser or certified accountant before your first invoice.

Reviewed by: pending (a Saudi tax adviser will be named before publishing) · Last reviewed: not yet reviewed

Bookkeeping requirements for companies in Saudi Arabia: three sets of rules

A company answers to three regimes, and each has its own retention period.

Set of rules	What it covers	Record-keeping period
Law of Commercial Books	The merchant’s books: journal, inventory book and general ledger, kept in Arabic (verify)	Not confirmed. Ask your adviser (verify)
VAT rules (ZATCA)	Invoices, credit notes and VAT records	At least 6 years from the end of the tax period (verify). Longer for capital assets: 11 years for movable and 15 years for immovable property (verify)
Zakat and corporate income tax (ZATCA)	Books and supporting documents behind the annual return	At least 10 years (verify)

The gap between 6 and 10 years most likely reflects different laws, but the commercial books retention rule has not been confirmed from an official text. Until your adviser confirms, keep everything for the longest period any of the three could require.

For the wider setup path, read our guide to business setup in Saudi Arabia from India.

Commercial books and the Arabic language rule

The Law of Commercial Books sets the base duty: a merchant keeps well-maintained books in Arabic. The minimum set is a journal, an inventory book and a general ledger (verify). Electronic storage is allowed for businesses that use computers, and the detailed security rules sit in the Executive Regulation (verify).

The same summaries mention an exemption for merchants with capital up to SAR 100,000 (verify). Whether it applies to a foreign-owned company is unknown, so do not rely on it.

For VAT, ZATCA’s invoicing and records guideline is reported to require VAT records and invoices in Arabic, and an invoice missing the required Arabic information may not count as a valid tax invoice (verify). Whether English ledgers kept by a parent company’s team meet this rule is a question for your adviser.

Important: “Arabic” can mean the books themselves, or Arabic output when ZATCA asks for it. Ask your adviser which one applies before you choose software.

Your ZATCA filings in year one

A new company’s first year usually includes three recurring ZATCA items. The table shows what ZATCA has published, with dates.

Filing	What ZATCA published	Date of source
VAT return	Quarterly for businesses with annual supplies up to SAR 40 million; monthly above SAR 40 million	Reminder of 21 April 2026
Zakat and corporate income tax return	Within 120 days of the end of the year	Reminder of 23 April 2026
E-invoicing	Phase 1 and Phase 2, see the next section	Roll-out page

VAT returns. ZATCA’s reminder for the first quarter of 2026, published on 21 April 2026, set a deadline of 30 April 2026 for that quarter. It also said a fine applies for failing to file on time, between 5% and 25% of the tax that must be declared. The VAT is charged at 15%, as ZATCA announced when the rate took effect on 1 July 2020. When your own first return is due, and whether your company files quarterly, monthly or annually, must be confirmed (verify). Another ZATCA page mentions an annual return for smaller businesses.

Annual return. ZATCA’s reminder for 2025, published on 23 April 2026, set 30 April 2026 for the year ending 31 December 2025. It cites a period of no more than 120 days from the end of the year. Whether your company pays Zakat or corporate income tax, or both, depends on its ownership. That is a decision for your adviser.

E-invoicing: what applies to a new company

ZATCA’s roll-out phases page describes two phases.

Phase 1, generation. Enforceable from 4 December 2021 for all taxpayers except non-resident taxpayers, and for parties that issue tax invoices on behalf of VAT suppliers.
Phase 2, integration. Enforceable from 1 January 2023, in waves. ZATCA says it notifies a wave at least six months in advance.

ZATCA has since published wave criteria based on past revenue. Wave 24 covered businesses with VAT-subject revenue above SAR 375,000 in 2022, 2023 or 2024 (verify), with integration due by 30 June 2026. Wave 25 covers revenue above SAR 187,500 in 2022 to 2025 (verify), and ZATCA will notify targeted taxpayers to integrate by 1 February 2027.

Both notices look back at revenue from earlier years. Neither says what happens to a company that registered for VAT in 2026 and has no history. We could not confirm whether such a company issues Phase 2 e-invoices from its first invoice or only after it is assigned a wave. This depends on the wave ZATCA assigns. Check it on the ZATCA portal and with a tax adviser, and keep the answer in writing with the date.

Choosing bookkeeping software

Pick software before your first invoice. ZATCA publishes a directory of e-invoicing solution providers, which is the place to start. Ask each vendor:

Is it on ZATCA’s solution-providers list, and does it cover Phase 2 integration?
Can it produce books and invoices in Arabic?
Where are the records stored, and can they be reached from inside Saudi Arabia (verify)?
Does it store invoices in a structured format, not only as PDF files (verify)?

Our Complete Setup Package includes complimentary VAT filing for 2 quarters and 3 months complimentary bookkeeping software (verify the exact scope with the team). Decide early who keeps the books once those periods end. See our pricing for inclusions and exclusions; VAT at 15% is excluded from our fees.

Notes for Indian finance teams

Whether your accounts team sits in India or Riyadh, check these early.

Invoice layout. A GST invoice template from India may not meet Saudi tax invoice rules. Your adviser should review the template.
Language. An English-only ledger may not satisfy the Arabic rule. See the section above.
Storage. Indian-hosted cloud systems raise the record-location question (verify).
Year-end. Indian groups close on 31 March. Your Saudi year-end and the Zakat or corporate income tax return follow Saudi rules. Ask whether the two can align.

How the Saudi company’s accounts feed your Indian parent’s accounts, and any reporting in India, is a question for your Indian chartered accountant.

Questions to take to your Saudi tax adviser

This guide is not tax advice. Before you set a policy or sign with a vendor, ask a Saudi tax adviser or certified accountant:

Is the company a merchant under the Law of Commercial Books, and which books and retention period apply?
Is our VAT return quarterly, monthly or annual, and when is the first one due?
Do we issue Phase 2 e-invoices from the first invoice, or after a wave is assigned?
Is a statutory audit required in year one, and under which accounting standards?
Which regime applies to us, Zakat or corporate income tax, and what is our year-end?

Common mistakes

Using one retention number for everything. Keep records for the longest period any of the three regimes could require, until your adviser confirms.
Waiting for a wave notice. Choose compliant software at the start.
Copying the parent company’s process. Indian templates, English-only ledgers and offshore storage can clash with Saudi rules (verify).
Missing the annual return. The Zakat and corporate income tax return falls within 120 days of year-end.
No named owner. Decide who files returns and who holds the ZATCA login.

Frequently asked questions

How long must a Saudi company keep its accounting records?

It depends on the regime. For VAT, sources point to at least 6 years from the end of the tax period (verify), with 11 and 15 years for certain capital assets and property (verify). For Zakat documents, at least 10 years (verify). The commercial books retention period has not been confirmed from an official text. Until your adviser confirms, keep records for the longest period that could apply.

Do accounting records have to be in Arabic?

The summaries we reviewed say a merchant’s commercial books must be in Arabic, and that VAT records and invoices must be in Arabic (verify). What is less clear is whether English ledgers, with Arabic output on demand, are enough. Ask a Saudi tax adviser what your company needs, and test your software’s Arabic output before you commit.

How often does a new company file VAT returns?

ZATCA’s reminder of 21 April 2026 said businesses with annual supplies up to SAR 40 million submit quarterly returns, and larger businesses file monthly. Another ZATCA page mentions an annual return for smaller businesses, so the correct frequency for a new company must be confirmed (verify). Ask your adviser for a filing calendar with your first return date.

Does a new Saudi company need ZATCA e-invoicing?

Phase 1, issuing e-invoices from approved systems, applies to all taxpayers except non-residents. Phase 2 integration happens in waves based on revenue. ZATCA has not said, in the notices we reviewed, which wave a company registered in 2026 falls into, or when. Check with ZATCA and a tax adviser, and choose software from ZATCA’s list.

Is an annual audit required for a foreign-owned company?

We have not confirmed an audit rule from an official source. ZATCA’s annual return reminder does not mention audited statements. Some advisory firms say foreign entities need a licensed Saudi auditor (verify), without an official citation. Ask your adviser whether an audit is required in year one, who appoints the auditor, and which accounting standards apply.

Next step

A new Saudi company needs books, VAT returns, an annual return and an e-invoicing plan. Confirm the open points with a Saudi tax adviser or certified accountant, then plan your first 90 days around them. Talk to our experts about setting up, or read why Saudi Arabia suits your business and which MISA licensing types fit your plan.

This guide is for general information and is not legal or tax advice. Requirements vary by company and can change; confirm current rules with ZATCA and a Saudi tax adviser, or speak to our team.

Updated: 14 October 2026. Reviewed by: pending.

Sources: ZATCA, e-invoicing roll-out phases; ZATCA, VAT return reminder, 21 April 2026; ZATCA, Zakat and CIT return reminder, 23 April 2026; ZATCA, VAT rate news, 30 June 2020; ZATCA, Wave 25 notice, 24 July 2026

Bookkeeping Requirements for Companies in Saudi Arabia: A New-Company Guide for Indian Founders