1First Edition | April 2024

Zakat, Tax and Customs Authority Cabinet Resolution No. (570) was issued dated 22nd Ramadan 1442H/ 4th May 2021G, merging the General Authority of Zakat and Tax and the General Customs Authority into a single entity named the Zakat, Tax and Customs Authority (henceforth ‘ZATCA’). The Authority works on collecting Zakat, taxes, and customs duties, ensuring the highest levels of compliance from Taxpayers And Zakatpayers in accordance with best practices and high efficiency. The Authority seeks to enable the Kingdom to become a global logistics hub by facilitating trade and protecting national security. It also regulates and manages all activities related to customs work and ports to ensure they reach the highest standards of efficiency, productivity, and competitiveness. This is achieved by providing high-quality, customer-centric services aligned with international best practices. 1.5 Purpose of the Guideline This Guideline sets out the prominent treatments contained in the Implementing Regulations for Zakat Collection - Edition 1445H, issued pursuant to Ministerial Decision No. (1007) dated 19th Sha‘ban 1445H. It explains such treatments, along with the related rules and exceptions, and includes a comparison with the previous treatment of the relevant clause, where applicable. In addition, an illustrative example of each treatment or amendment is provided for further clarification. A number of frequently asked questions have also been added regarding the method of application of the Implementing Regulations and the aforementioned Ministerial Decision. 2. Amendments and Treatments Set Forth in the Implementing Regulations for Zakat Collection This Guideline provides clarifications and explanations of the provisions of the newly amended Articles in the Implementing Regulations for Zakat Collection - 1445H/2023-2024G. In this Guideline, the Zakat, Tax and Customs Authority has studied and analyzed the prominent Articles and compiled them in this Guideline, together with illustrative examples, to inform Zakat payers thereof, bring viewpoints closer together, and reduce disputes and disagreements between Zakat payers and the Zakat, Tax and Customs Authority. 2.1 Exemption of Non-Profit Companies from Zakat Collection Article 7 of the Regulations provides as follows: “Persons exempt from being subject to Zakat collection: 1. Non-profit companies, and companies wholly owned by them, established in accordance with the provisions of the Companies Law and its Implementing Regulations and any amendments thereto, subject to the following: a. That the channels and fields of the non-profit company stipulated in its Articles of Incorporation or Bylaws do not fall outside the channels and fields designated for public non-profit companies. b. That the amount spent on any beneficiary does not exceed 10% of the company’s revenues, including the benefits of the company’s owners or members of its board of directors, or their remuneration, or their salaries in consideration for the services and works they provide to the company. c. That all company expenses, including those referred to in Paragraph B of this clause, are substantiated through the company’s audited financial statements, or a report issued by a licensed legal accountant in the Kingdom, or any other documents accepted by the Authority.” This treatment constitutes an exemption from being subject to Zakat collection for non-profit companies in accordance with the Companies Law issued by Royal Decree No. (M/132) dated 1st Dhu Al-Hijjah 1443H/30th June 2022G and its Implementing Regulations, which provide in