1First Edition | April 2024

Zakat Collection The significance of Zakat in Islam is evidenced by the entrustment of its administration and supervision to the State. The State is authorized to collect Zakat on visible wealth and to disburse it to eligible beneficiaries. This is carried out through assigning Zakat officers to visit wealth owners throughout the Islamic State, assess the amount of Zakat due, collect it from them, and supervise its disbursement and distribution to eligible recipients. The Zakat, Tax and Customs Authority undertakes the task of Zakat collection, as it assumes all procedures related to calculating the Zakat of the payer, beginning with the registration of the Zakat payer, passing through the process of calculating the Zakat due - which includes supervising the submission of Zakat returns and payment procedures - examining and reviewing such data, and verifying its accuracy through the human competencies available at the Authority, and concluding with the issuance of the final Zakat certificate, as well as any subsequent responsibility arising from the examination of objections submitted by the Zakat payer against the Authority’s Zakat assessments. 1.3 Application of Zakat Collection in the Kingdom of Saudi Arabia The collection and disbursement of Zakat to eligible beneficiaries is one of the core responsibilities of the State, as stipulated in the Basic Law of Governance, where Article 21 thereof states that: “Zakat shall be collected and disbursed in its lawful channels.” Furthermore, Article 7 affirms the State’s commitment to Islamic Sharia obligations, including the collection of Zakat and its disbursement to those entitled thereto, stating: “Governance in the Kingdom of Saudi Arabia derives its authority from the Book of Allah Almighty and the Sunnah of His Messenger, and they are the governing authority over this Law and all laws of the State.” In confirmation thereof, Royal Decree No. (8634/28/2/17) dated 29th Jumada Al-Thani 1370H/ 6th April 1951G was issued during the reign of the founding King Abdulaziz, may Allah have mercy on him, ordering the collection of Zakat. This decree was followed by numerous Royal Decrees affirming it, ministerial decisions implementing it, as well as regulations, circulars, and interpretative clarifications. These include: y Royal Decree No. (M/40) dated 2nd Rajab 1405H/24th March 1985G, the Implementing Regulations for Zakat Collection issued by Ministerial Decision No. (2082) dated 1st Jumada Al-Thani 1438H/28th February 2017G, and the Implementing Regulations for Zakat Collection issued by Ministerial Decision No. (1007) dated 19th Sha‘ban 1445H/29th February 2024G, the application of which shall apply to fiscal years commencing on 1st January 2024G or thereafter, and for which Zakat returns shall be filed during the year 2025G. The Implementing Regulations for Zakat Collection have, in particular, addressed the provisions governing Zakat collection in commercial and professional activities and similar activities, the requirements for filing the Zakat return, and the procedures for Zakat assessment, audit, and payment, as well as the time periods applicable thereto. The Zakat proceeds collected by the Zakat, Tax and Customs Authority shall be transferred and deposited into the Social Insurance account, which is responsible for disbursing them to their Shariah-prescribed channels, including the poor and the needy, in accordance with Royal Decree No. (61/5/1) dated 5th Muharram 1383H/28th May 1963G. Paragraph 1 thereof provides: “Zakat shall be collected in full from all joint-stock companies and others, as well as individuals subject to Zakat.” Paragraph 2 thereof provides: “All amounts collected shall be transferred to the Social Insurance Fund,” pursuant to Article 23 of the Social Insurance Law issued by Royal Decree No. (M/32) dated 4th Rabi‘ Al-Thani 1442H