01

Equality Principle Between Assets and Liabilities and the concept of liabilities placement related to it Article 20 of the Regulation stipulates the Equality principle and its application when calculating the Zakat base. The Equality principle is one of the most important principles related to adding liabilities to the base as an item of addition. This principle assumes that non-current liabilities shall be equal to non-current assets, and current liabilities shall be equal to current assets. It is also assumed that non-current assets are essentially deductions unless proven otherwise, and current assets are essentially not deductible unless proven otherwise. Based on the foregoing, non-current liabilities are added to the base as they equal to deductible assets, while current liabilities are not added to the base as they equal to non-deductible assets. Consequently, if a current asset is deducted, the equal current liabilities that were not added to the base must be added. Conversely, if a non-current asset is not deducted, the equal non- current liabilities that were added to the base must be excluded. This is in accordance with Article 25 of the Regulation on " Placement of Liabilities added to the Zakat Base " The term " Placement " here refers to the Correction of additions of liabilities to the Zakat base upon a current asset is deducted and a noncurrent asset is not deducted. The purpose of this procedure is to ensure the equality of current and non-current assets and liabilities. The related cases are as follows: No need to correct the addition of liabilities: This occurs when all non-current assets are deducted and all current assets are not deducted. 2. Need to correct the added liabilities: This occurs when one or both of the following conditions are met: a. When a non-current asset is not deducted, the addition of liabilities must be corrected by excluding a proportion of the non-current liabilities added to the base as follows: Non-current liabilities excluded from being added to the Zakat base= (non-current asset excluded ÷ total non-current assets) × non-current liabilities. Provided that the non-current liability excluded from the base shall not exceed the value of the un-deducted non-current asset. b. When a current asset is deducted, the addition of liabilities must be corrected by adding a proportion of the current liabilities that were not added to the base as follows: Provided that the added current liabilities shall not exceed the value of the deducted current asset. Placement Cases Placement Cases Case Action Type of Correction Value of Correction Deduction of all non-current assets and un-deduction of all current assets. None None None Un-deduction of non-current asset. Placement Excluding a proportion of the non-current liabilities from being added to the base. (non-current asset excluded ÷ total non- current assets) × non- current liabilities. Deduction of current asset. Placement Adding a proportion of the current liabilities not added to the base. (current asset deducted ÷ total current assets) × current liabilities. The non-current liability excluded from the base shall not exceed the value of the un- deducted non-current asset. Also, the added current liabilities shall not exceed the value of the deducted current asset. Current liabilities added to the Zakat base = (current asset deducted ÷ total current assets) × current liabilities.