14- Manual of Zakat Handling of Investments

Calculating and Paying Foreign Investment Zakat according to a Certified Public Accountant Licensed in the Kingdom of Saudi Arabia After calculating the zakat of the taxpayer’s share in foreign investment in accordance with the provisions of the Regulations, the task of ratifying such calculation is entrusted to a certified public accountant in the Kingdom of Saudi Arabia to issue the certificate in accordance with the requirements of auditing standards in force in the Kingdom of Saudi Arabia, which fall under assurance services. Below is a proposed form for a licensed chartered accountant certificate regarding foreign investment: [Proposed Illustrative Form for a Limited Assurance Report Certifying the Calculation of Zakat] Limited Assurance Report on Calculating Zakat for Invested-in Companies Established Outside the Kingdom of Saudi Arabia to the Partners in (Company Name) We have performed a limited assurance engagement to identify whether something has come to our attention that causes us to believe that what is detailed in the subject matter paragraph below (the “Subject Matter”) has not been properly prepared, in all material respects, in accordance with the relevant criteria set out below. Subject Matter: The subject matter of the Limited Assurance Engagement relates to Appendix (1) prepared by (Company Name)’s Management regarding the calculation of zakat related to non-commercial investments in entities established outside the Kingdom of Saudi Arabia (“invested-in companies”) for the year ended December 31, 20-- (“Table”), which was prepared under the assurance that the said Table complies with the Executive Regulations for Levying Zakat promulgated by Ministerial Resolution No. 2216 dated Rajab 07, 1440 AH (the “Regulations”), according to the interpretation of the Management. The Management’s explanations are given under the assumptions in the Table. Relevant Controls: 1. Articles: 4 (Zakat Base), 5 (Permitted Deductions), 6 (Zakat Base - Other Considerations), 8 (Permissible Expenses), 9 (Non-deductible Expenses) and 14 (Zakat Rates) of the Regulations, as interpreted by the Management. The Management’s explanations are given under the assumptions in the Table. 2. The preliminary financial statements of the invested-in companies, which consist of the statements of financial position and comprehensive income. Responsibility of the Management: The Management is responsible for preparing and presenting the information in the above subject matter paragraph in accordance with the relevant controls, and is also responsible for choosing the methods for applying said controls. The Management is also responsible for applying the internal control systems that it deems necessary to prepare and present the information contained in the subject matter paragraph and that it is free from any material misstatement, whether resulting from fraud or error, and to select and apply appropriate controls, maintain adequate records, and make reasonable estimates in accordance with the relevant circumstances and events. Our Responsibility: Our responsibility is to provide a limited assurance conclusion on the subject matter above based on the assurance engagement we performed in accordance with International Standard on Assurance Engagements (ISAE) 3000 “Assurance Engagements Other than Audits or Reviews of Historical Financial Information” approved in the Kingdom of Saudi Arabia, and the terms and conditions of that engagement that were agreed-upon with the Company’s Management. Our procedures are designed to obtain a limited level of assurance sufficient to provide a basis for our conclusion; and we have not obtained all the evidence required to provide a reasonable level of assurance. The procedures performed depend on our professional judgment, including the risks of material misstatement, whether due to fraud or error. We also considered the effectiveness of internal control systems when determining the nature and extent of our proce