Accounting in Saudi Arabia is a compliance function
For a foreign-owned company in Saudi Arabia, accounting is not just an internal tool. The same ledgers feed VAT returns, Zakat and income tax declarations, withholding tax returns, audited financial statements, payroll files and the monthly reports your headquarters expects. When the books are late or inconsistent, problems appear everywhere: a VAT return that does not match e-invoices, a tax return that cannot be reconciled to the audited accounts, or a wage file that does not match the employment contracts.
RDO handles the routine finance and payroll work of Saudi companies and branches of foreign companies, keeps every filing tied to one clean set of records, and coordinates with your licensed auditor at year end. We report in Arabic and English and keep communication clear with head offices in China, Turkey, Japan, Korea and beyond.
Bookkeeping under IFRS as adopted by SOCPA
Saudi companies prepare their financial statements under International Financial Reporting Standards as endorsed in the Kingdom by the Saudi Organization for Chartered and Professional Accountants (SOCPA). Some smaller entities may be able to use the endorsed IFRS for SMEs, depending on their profile. Choosing the right framework from month one avoids a painful restatement before the first audit.
- A chart of accounts aligned with IFRS and with the needs of VAT, Zakat and income tax
- Monthly recording of sales, purchases, expenses and bank transactions with supporting documents
- Bank, supplier, customer and intercompany reconciliations
- Fixed asset registers, accruals, prepayments and end-of-service provisions
- A clear separation between the Saudi entity's books and the parent company's books
VAT returns and other ZATCA filings
The Zakat, Tax and Customs Authority (ZATCA) administers VAT, Zakat, corporate income tax, withholding tax and excise tax. VAT-registered businesses file returns monthly or quarterly, depending on the filing period ZATCA assigns, and their figures must stay consistent with the electronic invoices issued through compliant systems under the Fatoora program. If you are still setting up invoicing, see our page on ZATCA e-invoicing.
- VAT registration support and a clear filing calendar
- VAT returns prepared from the ledger and e-invoice data
- Review of input VAT recovery, imports and reverse-charge items
- Answers to ZATCA queries and corrections through the proper channel
Zakat and corporate income tax for foreign-owned companies
Saudi Arabia uses a dual system. In general terms, the share attributable to Saudi owners (and, broadly, GCC owners) is subject to Zakat, while the share attributable to non-Saudi owners is subject to corporate income tax. A wholly foreign-owned company usually falls under the income tax regime, while a joint venture with a Saudi partner typically files one declaration that splits the base between Zakat and income tax according to ownership. Calculation rules, loss treatment and expense deductibility are set by ZATCA and updated from time to time.
Because the annual declaration is built on the financial statements, we keep the accounts tax-ready during the year, track the items that usually need adjustment, and prepare the Zakat and income tax declaration in line with the audited figures. If you are still choosing a structure, our investing in Saudi Arabia guide explains the main options.
Withholding tax on payments abroad
When a Saudi entity pays a non-resident party, for example for services, royalties, technical fees, interest or dividends, it is usually required to withhold tax and remit it to ZATCA through a periodic withholding return. The rate depends on the type of payment and on whether a tax treaty applies, and treaty relief normally requires supporting documents. Payments to the parent company are a frequent source of mistakes.
- Identify which outgoing payments fall under withholding tax
- Prepare and file withholding returns on time
- Keep records of treaty positions and supporting documents
- Align intercompany charges with contracts and, where relevant, transfer pricing documentation
Audited financial statements and the Qawaem platform
Companies registered in Saudi Arabia generally need their annual financial statements audited and filed with the Ministry of Commerce through its electronic platform, Qawaem, within the period set after the financial year end. The audit opinion can only be signed by an auditor licensed in the Kingdom, and RDO does not sign audit reports. We prepare the books, schedules and supporting files the auditor requests, coordinate the timetable, and follow up until the statements are uploaded and the tax declaration is finalised.
Practical tip: agree the audit timetable and the list of required schedules early in the year after closing. Audits move faster when reconciliations and fixed asset registers are already complete.
Payroll with GOSI, Mudad, WPS and Qiwa
Payroll in Saudi Arabia runs through several connected government platforms. Employees are registered with the General Organization for Social Insurance (GOSI), and contributions differ between Saudi and non-Saudi staff. Monthly salaries are reported through Mudad and the Wage Protection System (WPS), which compares actual payments with registered wages. Employment contracts are documented on Qiwa, the platform of the Ministry of Human Resources and Social Development (HRSD), which also reflects the company's Saudization status.
- Monthly payroll calculation, payslips and bank payment files
- GOSI registration, updates and monthly contribution checks
- Wage files uploaded on Mudad for the Wage Protection System
- Contract documentation and updates on Qiwa
- End-of-service benefit accruals in line with the Saudi Labor Law
- Leave, allowances and final settlements when employees leave
Monthly reporting for your headquarters
Foreign parents need more than statutory compliance. We prepare monthly management packs in the format your group uses: trial balance, profit and loss, balance sheet, cash position, intercompany balances and a short commentary, mapped to your group chart of accounts where needed. This lets your finance team consolidate the Saudi entity on time and spot issues early. If your plans change, we can also support liquidation or restructuring, and our glossary explains the Saudi terms you will meet.
