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The Intercompany Balance Confirmation Letter is a critical financial document used in Saudi Arabia when related business entities need to formally verify and confirm their mutual account balances. This document is typically prepared at regular intervals (monthly, quarterly, or annually) or when required for audit purposes. It plays a vital role in ensuring accuracy in financial reporting, maintaining transparency between related entities, and supporting tax compliance under Saudi regulations. The letter must comply with Saudi Arabian commercial law, SOCPA requirements, and Sharia principles, making it distinct from similar documents used in other jurisdictions. It's particularly important during financial year-end closing, external audits, or when preparing consolidated financial statements. The document includes comprehensive details of intercompany transactions, outstanding balances, and any reconciliation items, serving as an official record for both internal and external stakeholders.

1. Letterhead and Date: Company letterhead with full legal name, commercial registration number, and date in both Gregorian and Hijri calendars

2. Recipient Details: Full details of the recipient company including legal name, address, and commercial registration number

3. Subject Line: Clear indication that this is a balance confirmation letter and the relevant period

4. Opening Statement: Formal greeting and reference to the business relationship

5. Purpose Statement: Clear statement of the letter's purpose for confirming intercompany balances

6. Balance Details: Statement of the balances to be confirmed, including currency, amounts, and as-of date

7. Confirmation Request: Request for confirmation of the stated balances and instructions for responding

8. Response Timeline: Specified deadline for responding to the confirmation request

9. Closing: Formal closing statement with authorized signatory details