Record-Keeping Obligations: What ZATCA Requires You to Retain

Article 66 of the VAT Implementing Regulations is the primary record-keeping provision. It sets out retention periods, language requirements, storage location rules, and conditions for electronic storage. The GCC VAT Agreement (Article 59) establishes the minimum framework at treaty level, with the Kingdom implementing more detailed requirements through Article 66.

The GCC Agreement’s baseline position: tax invoices, books, records, and accounting documents must be retained for a minimum of five years from the end of the year to which they relate. For records pertaining to real estate, the GCC Agreement extends this to fifteen years. Saudi Arabia’s own implementing rules go further in certain respects — establishing a six-year retention period for most records and specific rules for capital assets.

Article 66 covers “invoices, books, records and accounting documents.” In practice, this encompasses:

• All tax invoices issued — both outbound (supplier copies) and inbound (customer copies received)
• All credit and debit notes — including the original invoice referenced by each note
• All simplified tax invoices — both issued and received where relevant
• VAT returns and workings — the filed returns for each tax period and the underlying calculations
• Input tax schedules — the supporting detail behind input VAT deduction claims
• Proportional deduction calculations — where the business makes both taxable and exempt supplies
• Currency conversion calculations — the SAMA daily rates used and the VAT calculations for all foreign-currency transactions
• Import documentation — customs declarations and supporting documents for imported goods
• Capital asset records — purchase invoices, asset registers, and adjustment calculations for the full applicable adjustment period plus five years
• Contracts and agreements — underlying commercial contracts that establish the nature, value, and VAT treatment of supplies
• Self-billing agreements — written agreements with suppliers under any self-billing arrangements
• E-invoices in structured format — where the business is subject to e-invoicing regulations, electronic invoices must be retained in their original structured format

Language: Arabic

Article 66(2) requires that records be kept in Arabic, and that all tax invoices be issued in Arabic (with other languages permitted as translations alongside). For electronic systems, Article 66(3)(b) specifies that data should be entered in Arabic to the extent practicable.

Businesses that maintain their accounting systems primarily in English — common for multinationals using global ERP templates — must ensure that the underlying invoice data (supplier name, description of supply, etc.) satisfies the Arabic requirement. A system that stores records exclusively in English is technically non-compliant, though the practical consequence depends on the ability to produce Arabic-language outputs on demand.

Location: Must Be Accessible in the Kingdom

Article 66(3) requires that invoices, records, and documents be kept in the Kingdom — either physically or electronically. Electronic storage is explicitly permitted, subject to conditions, but the data must be accessible through a terminal point or access point in Saudi Arabia. Cloud-hosted records stored on servers in foreign jurisdictions satisfy this requirement only if they can be accessed and produced from within the Kingdom upon ZATCA’s request.

Article 66(3) sets out the conditions that must be met when records are stored electronically. These are not optional guidelines — they are legal requirements:

• Invoices, documents, and records must be accessible and producible from the computer system used upon ZATCA’s request
• Data must be entered in Arabic to the extent practicable, and the electronic records must be identical copies of the original documents
• Original documents corroborating accounting entries must be maintained and produced upon ZATCA’s request
• Final accounts and balance sheets may be generated directly from the computer system
• The business must document its data entry procedures and accounting system for reference
• Adequate security measures and controls must be in place to prevent tampering with electronic records
• ZATCA may conduct a review of the systems and programs used to prepare records electronically
• Persons subject to the e-invoicing regulations must retain electronic invoices in the structured format prescribed by those regulations — not simply as printed PDFs

Article 64(6) of the Implementing Regulations governs the examination process. ZATCA auditors may:

• Conduct examinations at the business’s premises on 20 days’ notice — or without notice where ZATCA has grounds to suspect a violation or non-cooperation
• Request physical copies or electronic files of records during the examination
• Temporarily seize documents if there is reason to believe they may be hidden, damaged, or tampered with
• Conduct searches and collect evidence where a violation is suspected

Article 66(4)(a) permits a resident taxable person to appoint a third party in the Kingdom to manage their record-keeping obligations — without releasing the taxable person from responsibility. Article 66(4)(b) requires a non-resident taxable person without a tax representative to appoint a Kingdom-based third party specifically for this purpose.

The limitation period for ZATCA assessments is generally five years from the end of the calendar year in which the tax period falls (Article 64(3)). Where ZATCA has evidence of intentional breach or where a person failed to register, the assessment window extends to twenty years. Records must therefore be retained to cover whichever assessment window applies to the business’s risk profile.