Contract notes must be submitted if the following conditions are met:

• Contracts with residents or non-residents with a permanent establishment in the state with a value of at least (200,000) two hundred thousand Riyals for service contracts and (500,000) five hundred thousand Riyals for contracting, supply, and service contracts.
• Non-resident contracts have no permanent establishment in the state, regardless of value.

The significance of contract reporting resides in its ability to maintain control over the business contracts and the data it includes, even in the face of continually increasing numbers. The quantity of contracts a business considers, drafts, oversees and keeps increases as a business grows. With a small team, this makes it hard to maintain track of all of the contract portfolios.

• Failure to meet contract deadlines: Lack of visibility into upcoming contract milestones and deadlines can make it difficult to oversee and manage relationships with vendors and consumers. It may even lead to undesired contract renewals in some situations.
• Controversy across departments: Communicating contractual obligations and expectations across departments becomes more difficult as it comes to managing more contracts. Last-minute demands and unfilled promises can lead to tension.
• Tough to assess performance: It might be difficult to measure success against legal KPIs unless one has a firm grasp of contract compliance and other contract measures.
• Taking risk management too late: Contract reporting provides more information than just contract length and agreed-upon terms. It can also inform the status of customer relationships and alert potential contractual risks.
• Contractual violation: Accurately tracking contracts will help to avoid the pitfall of missing deadlines. Furthermore, there may be severe consequences, especially if a contract is violated.

• Inform stakeholders concerning contracts.
• Recognise and act promptly on contractual hazards.
• Reduce legal complexity and focus on key data points.
• Effectively manage contract deadlines.