What’s VAT?

VAT is an indirect tax imposed on the import and supply of goods and services at each stage of production and distribution, with some exceptions.

What’s income tax?

A direct tax on shares of non – Saudi partners in money companies, non – Saudi residents who engage in business within the Kingdom, and non-residents who earn income from doing business in the Kingdom.

What’s a selective tax?

An indirect tax imposed in the Kingdom on certain goods (selective goods) shall be collected from any natural or legal person engaged in a specific activity relating to such goods.

What’s a mortgage tax?

A real estate conduct tax is an indirect tax imposed on all conduct by which a legal effect is produced, namely, the transfer of title to, or possession of, property for the purpose of owning the property.

What’s the input tax?

Tax on costs incurred in the exercise of economic activity and by means of its calculation of the relative deduction, which includes tax expenses and tax-free expenses.

What’s the deduction tax?

Tax deducted from funds obtained by non-residents in the Kingdom.

What are the goods covered by the selective tax and its ratio?

  1. Tobacco products are 100% on retail price.
  2. 100% energy drinks on retail price.
  3. Soda at 50% on retail price.
  4. Sweet drinks at 50% off retail price.
  5. Electronic smoking appliances and liquids are 100% on the retail price.

What’s the method of making a Declaration?

Each facility subject to the Zakat must file its Zakat declaration within 120 days after the end of the financial year of the facility through an electronic portal.

What are the procedures in the event that there are false declarations to be filled out, knowing that the trade register is canceled by the Ministry of Commerce?

The taxpayer who has ceased the activity shall notify the Authority within 60 days from the date of cessation, with declarations to the date of cessation, write-off of the register, and submission of a declaration of liquidation of accounts and financial obligations.

Are fines and penalties imposed for violations of the selective tax regime?

Penalties shall be applied in the event of delay in registration, the submission of a declaration or its non-validity, or the submission of misleading statements.

Is it the most prominent commitment of selective commodity producers and importers?

Registration on the site of the General Authority for Zakat and Income according to approved models

  1. Get licenses.
  2. Provide a tax declaration in accordance with the prescribed period.
  3. Payment within 15 days of the statutory date of submission of the declaration.

What’s VAT?

VAT (VAT) is an indirect tax applicable to goods and services found in Saudi Arabia except were expressly exempt.

When will VAT be introduced?

VAT will be introduced in Saudi Arabia with effect from 1 January 2018.

Which government is responsible for VAT?

  1. It’s the general body of zakat and income. The official website is www.gazt.gov.sa.
  2. For more information on VAT, please visit the following link www.vat.gov.sa.

Is thee – bill a mandatory bill?

Electronic invoices (invoice) are mandatory for VAT and any third party that issues tax invoices on behalf of suppliers is subject to VAT.
Non-residents and those who need to pay taxes are excluded.

What’s the effective date of the e – bill?

Electronic billing is applied in two phases:

  1. Phase one: The “liberation phase” will be introduced on December 4, 2021.
  2. Phase two: “Integration and linkage phase.”

It will be implemented in stages starting from 1. January 2023. The phase authorities will decide to link the electronic billing system and notify the class of the target for each stage before the specified date of at least six months.

Given that there are so many technical requirements, can I prepare an electronic bill?

In most cases, technical requirements are determined by the electronic system supplier (e.g., the hardware supplier), the cashier, the software vendor (or an internal technical team used for internal solutions.

Therefore, taxpayers can communicate with Electronic Ultralight service providers or their internal technical team to get the solution to meet technical requirements and ensure portability The solution is to issue compatible invoices from December 4, 2021.

What is the editing phase for the issuance of electronic invoices, when and for whom?

  1. Phase one: The issuance phase requires taxpayers to issue and retain invoices and notices
  2. Compliance taxes are implemented through an electronic system compatible with the management system.
  3. The first phase will enter into force for supervised personnel on December 4, 2021.
  4. For further information on prohibited specifications and functional characteristics, see Supplement No. 1 (Technical requirements for the technical solution used in billing electronic notifications “in the resolution.

How will the photographic process change from December 4, 2021?

All persons subject to the Electronic Billing Regulations must use the FDA-compliant Electronic Billing Systems to issue invoices as of December 4, 2021.

    1. Manual bills will not be considered as tax bills consistent with FDA regulations.
    2. Electronic invoices must include a minimum number of additional fields. Dear reader, see the next question.
    3. Electronic systems must be able to create rapid response codes known as Code QR.
    4. Electronic billing systems must not allow prohibited jobs identified by Zakat, Tax, and Customs.
    5. All you have to do is contact the provider of electronic systems and technical solutions or so-called internal technical teams to ascertain this.
    6. Its technical solution meets the requirements of the Zakat, Tax, and Customs Service.
    7. Specialists visit the FDA website for all technical safety requirements.

How is the mandatory registration limit calculated?

The mandatory registration threshold is calculated on the basis of the volume of taxable sales excluding capital assets, either on the basis of the past twelve months or the next twelve months.

Do establishments that fall under the voluntary threshold of tax registration have to be registered in order to be able to deal with large enterprises?

Establishments that fall under the voluntary threshold are not eligible to register for VAT. As for establishments that meet the voluntary registration threshold and do not exceed the mandatory registration threshold, they are free to register for VAT.

How are the establishments of one group dealt with? Is there a maximum amount of group revenue upon which they are treated as separate entities?

Two or more legal persons may apply for registration as a value-added tax group in the Kingdom if the following requirements are met:

1- That every legal person resides in the Kingdom and carries out an economic activity;
2- Each legal person must have 50% or more of the capital value, or ownership or control of (50%) or more of the voting rights or value, whether in all or all of the legal persons, held by the same person or group of persons. , whether in any of the previous cases, directly or indirectly.
3- That at least one of the legal persons is a taxable entity eligible for registration in its own right.

Is it possible to form a group for VAT purposes in the GCC countries?

No, as one of the requirements for VAT groups is for every legal person to be residing in the Kingdom and carrying out an economic activity.

Is the VAT registration threshold applied to the revenues of all stores affiliated with the establishment collectively, or is each store considered independent?

Registration limit applies to the facility level.

What is the difference between a foreign investor who is exempt from tax and a non-resident investor practicing an economic activity?

The value-added tax system and its executive regulations did not grant investors any exemptions, therefore any person who practices economic activity in the Kingdom, whether resident or non-resident, is subject to tax in the Kingdom.

What should be done if a tax group representative loses his eligibility to register for VAT?

If a tax group is created based on a member’s taxable status and that member loses their eligibility, then the group must deregister.

If I have annual supplies whose value exceeds the mandatory registration threshold, but all supplies are only subject to the zero rates, do I have to register?

Any person whose annual supplies in the Kingdom at any time exceed the mandatory registration threshold is excluded from mandatory registration if all supplies are subject only to the zero rates. He may submit an optional registration application.

Should I register if I am a non-resident?

In accordance with Article 5 of the Executive Regulations and Article 50 (the third paragraph) of the Unified Agreement of the Cooperation Council for the Arab States of the Gulf, non-residents must register for VAT when making any supply that is subject to VAT; This applies to supplies in which a customer is a non-taxable person who cannot self-calculate the tax.

When did the VAT registration start?

Registration officially started on August 28, 2017

For businesses that are already registered for income tax, do they have a separate registration for value-added tax?

Yes, there is a separate process to register for VAT. However, information on existing taxable facilities in existing databases will be utilized to the fullest extent possible.

Is a new tax registration number required for value-added tax?

After completing the registration process, the authority will issue a registration certificate with a separate VAT registration number.

What are the requirements for VAT registration?

Any registration application must contain at least the following information:

1- The official name of the legal person
2-  The actual address of the place of residence or place of work email
3- The current electronic identification number issued by the authority, if any
4- Commercial registration number
5- The value of annual supplies or annual expenses
6-  Actual or required registration date

What is Smart Registration SMS (Auto Registration)? What should the company do? What if the proceeds do not exceed the registration limit?

The Smart Registration SMS seeks to notify taxpayers that the General Authority of Zakat and Tax has established their VAT account based on information obtained from several sources.

In the event that the taxpayer considers that he is not obligated to register for VAT, he can submit a request to cancel the registration.

If the taxpayer believes that he is subject to VAT, he must enter his account and make sure that his data (such as name, supplies, and purchases eligible for tax) have been entered correctly.

What are the different ways to register for VAT?

Registration is only done through the official website of the General Authority for Zakat and Income gazt.gov.sa

How is the detailed registration process?

If you already have a TIN, you can follow the following detailed steps:
1) Open the Authority’s website via www.gazt.gov.sa and then click on “User Login”
2) Enter the correct username and password, then press “Login”.
3) Enter the one-time login code sent by SMS to the mobile number registered with the Authority (the same number for all taxes).
4) The taxpayer home page will open
5) Here you will find a box where taxpayers can register (if they are not already registered) or change their registration information.

If you do not have a TIN, you must apply for a TIN before registering for tax.

How is a tax group registered?

An application is submitted to register a tax group through the authority’s website, and the authority studies and approves or rejects this application. The registration for tax groups will be opened soon.

Do all tax group members have to register for VAT?

The application to form a tax group is submitted by a taxable person, and this person is considered a representative of the tax group and is responsible for the obligations and rights arising from the group on behalf of all its members.

  1. Without prejudice to the joint liability of the rest of the group members.
  2. The application to form a tax group is submitted by a taxable person.

This person is considered a representative of the tax group and is responsible for the obligations and rights arising from the group on behalf of all its members, without prejudice to the joint liability of the rest of the group members.

A parent company has 100% control of a Tier 1 subsidiary and fulfills the requirements for VAT. The subsidiary also owns 100% of a Tier 2 subsidiary. Can the parent company avoid forming a group with the first-level subsidiary and making a group with the second-level subsidiary?

Yes. The parent company has the right to create a tax group with any other company if the requirements mentioned in Article 10 of the Executive Regulations are met.

When does the registration take effect after submitting the application?

Registration shall take effect from the beginning of the month following the month in which the registration application was submitted.

What is the process of canceling a VAT registration? Can it be done through the website?

Taxpayers can submit a request to cancel the registration by logging into their account on the website of the General Authority for Zakat and Tax. The applicant must fill out an application for deregistration and submit documents that support his eligibility for deregistration.

What are the requirements for mandatory deregistration?

  1. The taxable person must apply for deregistration within 30 days after the following:
  2. The taxable person ceases to practice his economic activity, including the demise of his legal personality
  3. The non-resident taxable person at the end of any month has not made any taxable supplies inside the Kingdom during the last 12 months.
  4. The occurrence of all the following cases for the resident:

1) The value of annual supplies or annual expenses for the previous 12 months did not exceed the voluntary registration limit.

2) The total value of annual supplies or annual expenses in the previous 24 months does not exceed the mandatory registration threshold.

3) The total value of annual supplies or annual expenses in any month and the following 11 months is not expected to exceed the voluntary registration limit.

What are the requirements for voluntary deregistration?

Deregistration is optional if:

  1. The value of the taxable sales of the establishment in the previous 12 months ranged between 187,500 riyals and 375,000 riyals.
  2. The expected sales value of the taxable facility in the following 12 months (including the current month) ranged between 187,500 and 375,000 riyals.

What information should be specified in the VAT registration form?

The registration form must include the following information:
1- The legal or natural name of the applicant and personal data if the applicant is a natural person,
2- The physical address of the usual place of residence or place of business
3- Email
4- The electronic identification number issued by the Authority, if any,
5- Commercial registration number, if any
6- The value of supplies or annual expenses
7- The effective date of the registration or any alternative effective date that has been submitted.
8- If you are not an importer
9- If you are an exporter
10- IBAN number – not necessary if you are already registered with the authority
11- The start date of the taxpayer’s eligibility for VAT
13- Taxable sales value (for the past 12 months)
14- Amount of taxable purchases (past 12 months)
15- Financial details of his tax representative (mandatory for non-residents in the Kingdom only)

Will there be a deadline for the facilities to prepare?

1- The registration period for establishments with revenues of less than one million Saudi riyals will extend until the end of 2018.

2- After this date, a grace period will not be granted.

3- If the supplier is not registered for VAT but the materials he supplies cannot be dispensed.

With, is the facility entitled to not pay him the value-added tax calculated at 5% of the total invoice?

The taxable supplier is responsible for issuing an invoice that includes the appropriate VAT rate. If the supplier is not registered for VAT, he is not entitled to collect VAT, and therefore the business should not pay VAT to the supplier.

Does the facility within the GCC countries have to register in the destination country?

It does not have to do this in all cases, as supplies made within the Gulf Cooperation Council countries can be made through the reverse charge mechanism, without the need to register the supplier.

Is it allowed to deal with unregistered establishments even though their taxable revenues exceed the mandatory limit?

Yes, bearing in mind that the responsibility for registration rests with each establishment itself. Therefore, taxable entities should consider the negative consequences of dealing with an unregistered business partner.

Do we need a separate VAT number for each commercial registration?

No. The branch and the head office of the business are considered one individual subject to VAT, as they are part of the same legal entity. This also applies in the case of two branches with different business records.

Do I have to be registered for income tax and zakat in order to register for VAT?

Yes, in order to register for value-added tax, establishments must be registered with the authority for zakat and income tax first.

What is the period for submitting tax returns for value-added tax, and what is the time limit for the General Authority of Zakat and Income to receive these returns?

1- A taxable entity must submit tax returns to the Authority electronically for each tax period no later than the last day of the month following the end of the tax period related to the submitted tax return.

2- All establishments subject to VAT that have an annual supply of goods and services whose value exceeds 40,000,000 SAR must submit a monthly VAT return.

3- All other establishments subject to the value-added tax must submit a value-added tax return every three months.

4- The authority also allows establishments to have the option of submitting monthly applications after the approval of the General Authority for Zakat and Income Tax.

5- The tax due by the taxable entity must be paid on the last day of the month following the end of the tax period.

In the case of a group of establishments or a holding facility, should tax returns be submitted at the level of the group/holding facility or separately for each entity?

The system treats establishments registered as a tax group as a single taxable establishment, and therefore the value-added tax must be aggregated at the group level as a whole.

When can I start filing as a group after I have applied to register as a tax group?

Establishments that have applied for registration as a tax group can only start filing as a group during the next filing period.

1- For example, if you are filing on a monthly basis and you applied to register as a tax group in February and were granted a group registration certificate. You will be able to file your returns as a group starting in March which is due by April.

2- The February declaration will remain in accordance with the registration status, which was valid in February, as each facility is expected to submit its declarations individually as was the case before submitting the application for registration as a group.

What are the requirements/conditions for dealing with the billing accounting system (accrual accounting) in exchange for cash (i.e. after payment of the amount by the customer)?

A taxable facility is allowed to submit an application to deal with the cash accounting system if the annual value of taxable supplies in the past calendar year and the expected value of taxable supplies in the current calendar year does not exceed 5 million Saudi riyals, in order to support small businesses in implementing the value-added tax.

As for the taxable establishments whose taxable supplies exceed that limit, they submit their tax returns to the General Authority for Zakat and Income in accordance with the billing accounting system.

How does the General Authority for Zakat and Tax verify the correctness of what is stated in the returns, whether they are less or more than what is required?

The General Authority of Zakat and Income uses financial and other audit procedures in its own way to verify the correctness of what is contained in the tax returns, whether it is excessive or less than required.

What is the interface/IT system that the General Authority of Zakat and Income uses to submit tax returns?

The process of submitting tax returns is done through the current electronic portal of the General Authority of Zakat and Tax.

What are the requirements that must exist in the information technology systems of the establishments in order to be able to link them with the systems of the General Authority for Zakat and Tax?

Dealing with VAT registration, filing of returns, and other related processes are done through the current electronic portal of the General Authority of Zakat and Income, which does not require a direct link to the facility’s systems.

How is VAT applied if the products are sold locally but in a foreign currency (such as US dollars)?

When the amount is in a currency other than the Saudi Riyal, the amount must be converted into Saudi Riyals using the daily exchange rate determined by the Saudi Arabian Monetary Agency on the tax due date.

Should the VAT due on each transaction (i.e. special supplies for each specific sale) be calculated or can it be calculated on a gross basis?

The value of the VAT due is calculated by subtracting the incoming VAT (collected from sales) from the issued VAT (paid on purchases). The net amount shall be paid or received from/to the General Authority for Zakat and Income Tax. Thus it is calculated on a gross basis.

Is it possible to adopt the Hijri calendar when submitting the tax return?

No. According to the Unified Agreement of the Gulf Cooperation Council, the time periods must be calculated according to the Gregorian calendar.

Do companies have to pay the full amount of VAT upfront? Is it possible to deduct VAT on purchases from the amount of tax collected from customers?

If the company is registered for value-added tax, it is entitled to deduct the taxes it paid from the value of taxes collected from customers and then send it to the authority.

What is the list of used goods for which VAT is calculated based on the profit margin?

The used goods for which VAT is calculated based on the profit margin will be determined by the Authority at a later time.

12- How do we amend previous VAT returns?

Taxpayers use debit and credit notices to adjust for excess or underappreciated VAT declared in previous invoices.

Credit notes: If the VAT collected by the supplier exceeds the true value of the supply, the supplier must issue a credit note to the customer for the difference in the amount.

Debit notes: If the VAT collected by the supplier from the customer is less than the actual value of the supply, the supplier must issue a

Debit Note to the customer for the difference in the amount?

The credit and debit note notes must include the tax invoice number of the original transaction to which they are related.

What is the deadline for making corrections to my tax return?

If the taxpayer needs to make an amendment to the tax return that he has previously submitted for a previous tax period. he must notify the General Authority of Zakat and Tax within (20) twenty days by submitting a tax return amendment form.

If the net tax difference is less than or more than 5,000 riyals, the transaction may be corrected by adjusting the net tax in the next tax return of the establishment.

How is the amount of value-added tax due to the Authority paid?

Establishments must pay the value-added tax due on them using the “SADAD” payment system using the code 020.

What should I do if I am unable to pay the VAT to the Authority when it is due?

If the taxpayer is not able to pay the value-added tax when it is due, he can submit a written request to the General Authority for Zakat and Income Tax to extend the time for payment, provided that he states:

  1. The amount of tax due.
  2. The tax periods are associated with that amount.
  3. Reasons for not being able to pay on time, with supporting documents attached.

The General Authority for Zakat and Income Tax will issue an official notification to the taxpayer, accepting or rejecting the request within (20) twenty days from the date of receiving the extension request.

What is the tax account for my business?

Each establishment has a tax account with the Authority that shows all balances and taxes paid or payable or taxes paid in excess during all periods.

2- If I am eligible to defer my registration until December 20, 2018, because my income exceeds the mandatory registration threshold of 375,000 and does not exceed SAR 1 million, do I have to file a return if I register before December 20, 2018?

If you are registered in the VAT system, you must submit the returns starting from the date of application of the tax, and if you have not yet registered for the tax, you can postpone your registration until January 1, 2019 (in all cases, the registration application must be submitted before December 20, 2018), and you must Then you have to file tax returns.

What are my obligations regarding the issuance of tax invoices?

Tax-registered suppliers must issue invoices documenting their revenue and tax details for all taxable sales made to taxable persons or non-registered legal persons.

How should invoices be amended to include VAT (the data being modified)?

The VAT invoice must include the following details in Arabic, as well as any translation thereof in another language that appears on the tax invoice:

  1. The date of issue;
  2. The serial number that uniquely identifies the invoice;
  3. The supplier’s tax identification number;
  4.  In cases where the customer is required to calculate the tax on the supplied goods/services.
  5. The tax identification number of the customer must be mentioned with a statement that he must calculate the tax.
  6. The legal name and address of the supplier and customer;
  7. The quantity and nature of the goods supplied or the scope and nature of the services provided;
  8. The date of supply, if different from the date of issue of the invoice;
  9. The amount subject to tax at the rate or exemption and the unit price inclusive of VAT and any discounts or rebates if not included in the unit price; The applicable tax rate; the amount of tax payable in riyals;
  10. Where no tax is charged at the basic rate, an explanation of the method of tax treatment applicable to the supply must be included;
  11. In cases where the tax is applied on the price margin for used goods, it is indicated that the value-added tax is applied on the price margin of these goods

Does the VAT identification number of the supplier/customer need to be mentioned on the invoice?

Tax invoices must include the supplier’s tax identification number. In cases where the consumer is required to calculate the tax on the supplied goods/services himself, his tax identification number must be mentioned with a statement that he must calculate the tax.

Are there differences in how invoices are organized according to the counterparty to the invoice (e.g. invoices issued to small and unregistered markets differ from those issued to large markets)?

  1. The requirements for a VAT invoice do not differ depending on the counterparty to the invoice.
  2. However, a simplified tax invoice may be issued for goods or services whose value is less than (1,000) thousand riyals.
  3. A simplified tax invoice may not be issued in connection with the internal supply or export of goods.

Is it possible to use “self-billing”?

Self-invoicing is used in the event that tax invoices are issued by the customer on behalf of the supplier, in connection with the taxable supply made to the customer. Provided that a prior agreement has been reached between the supplier and the customer in this regard, and this agreement must confirm a procedure for the acceptance of each invoice by the supplier Goods or services, and include an undertaking by the supplier not to issue tax invoices in relation to those supplies.

Currently, the actual invoices are not sent to the customer if the invoice amount is less than 100 SAR. If customers do not receive a VAT invoice, how can they claim VAT?

A simplified tax invoice may be issued for the supply of goods or services whose value is less than (1,000) one thousand riyals. A simplified tax invoice may not be issued in connection with the inter-supply (sales to GCC countries) or the export of goods.

For customer invoices covering a period of time before and after VAT (December 2017 – January 2018), should the consumption tax/other charges be applied to start from January 1, 2018?

When supplying goods or services under a contract where the application of VAT to the supplied goods or services was not expected at the time of its issuance.

The supplier can treat this contract as subject to zero-rate tax until the contract’s expiry or renewal or December 31, 2018, whichever is sooner, provided:

That the contract entered into force before May 30, 2017

That the customer has the right to deduct the entire tax on the input materials in relation to the goods or services provided or to be eligible for a refund of the value of the tax.

The customer submits a written certificate to the supplier that the tax on the input materials can be deducted or refunded in full on the supplied goods or services.

 What does a simplified invoice mean?

A simplified invoice is an invoice that contains information and simple details less than the detailed tax invoice and is issued only when the amount is less than 1000 riyals.

What information should be mentioned in the simplified tax invoice?

Establishments can approve the simplified tax invoice for goods or services whose value is less than 1000 riyals and not classified as imports or internal supplies. Simplified tax invoices should contain the following:

  1. Date of issue of the invoice
  2. The full name, address, and a unique number of the supplier.
  3. Description of the goods or services supplied
  4. The total value payable for the goods or services referred to in the invoice
  5. The tax payable or an indication that the total value mentioned includes tax.

What are the cases in which the value of the supply changes?

The value of the supply may change in certain cases, as specified in Article 40 of the VAT Implementing Regulations. Some examples:

  1. When canceling an order for goods whose value has been paid but not delivered, and the value of this order must be refunded.
  2. When the customer chooses to cancel a service that was not fully provided to him.
  3. In this case, the collected tax and the amount of revenue must be partially modified.

When should invoices be issued?

Any tax invoice must be issued no later than the fifteenth day of the month following the month in which the transaction took place.

Does the Authority accept copies of invoices if the original invoices are not available?

Records should be kept in the Kingdom in their paper or electronic form that can be accessed through the server on which they are stored, and they must be extracted upon request by the Authority. Although the authority prefers original copies, true copies of original invoices can be accepted.

Is it possible to issue a cash invoice at the end of the month that summarizes all the bills of regular customers into a single cash transaction?

A summary of invoices may be issued provided that the supplies mentioned in the clearer were made by the same supplier and during the same tax period, and the invoice should contain all other requirements for tax invoices set forth in Article 53 of the Implementing Regulations.

Should the name of the main facility or branch be included when the branch issues the invoice, even though the name of the main facility is on the tax certificate?

For VAT purposes, invoices should be issued in the name of the main establishment mentioned in the tax certificate in addition to the name of the branch or without the name of the branch, as the issuance of invoices is subject to the conditions set out in the Implementing Regulations for the tax.

Does the General Authority of Zakat and Tax require obtaining data/files in digital or paper form?

The Authority does not require the submission of any invoices or supporting documents for VAT returns. Documents in electronic or paper form in Arabic must be retained for a period of 6 years for audit purposes

What is the policy adopted by the Authority regarding electronic document archiving?

Invoices, books, records, and accounting documents that the concerned entity is required to keep in accordance with the agreement must be kept for a period of no less than six (6) years from the end of the relevant tax period.

Records related to capital assets must also be kept for the minimum period of settlement period for these assets stipulated in Article No. 50 of the Regulations, in addition to five (5) years from the date of acquisition of the capital assets by the concerned authority.

Records must also be kept inside the Kingdom, either in paper form or by accessing the server where these records are stored. In cases where the taxable entity chooses to keep records in an electronic form, the following conditions must be met:

a) The computer system or server must be located inside the Kingdom. A taxable entity that owns a fixed entity in the Kingdom may have a central computer outside the Kingdom, provided that there is a terminal computer in the affiliated entity inside the Kingdom through which all data and entries related to the account of the fixed entity in the Kingdom can be accessed;

  1. The data entered into the computer system should be in Arabic and be an exact copy of the mentioned books.
  2. The original documents supporting all entries in the accounting books are kept within the Kingdom.
  3. It is possible to issue the final accounts and the balance sheet directly through the computer.
  4. In the event that a traditional accounting method is followed with the help of a computer in some account items, all settlement entries must be submitted in Arabic.
  5. That the taxable entity documents the entries of the data entered into the computer and the accounting entries processing system for reference when needed.
  6. That the taxable entity applies the necessary security measures and controls sufficient that can be reviewed and examined to prevent tampering;
  7. The Authority may conduct an electronic review of the systems and programs applied by the taxable entity in order to prepare its electronic accounts.