1Issue 1 | September 2024

Purpose of the Guideline This Guideline provides directional instructions and essential information regarding Zakat collection requirements, its application mechanism, and the obligations of Zakat payers (for Financing Activity Zakat payers) This Guideline helps create a clear understanding and offers practical guidance on the implementation of Zakat collection in the Kingdom of Saudi Arabia. Further, this Guideline represents ZATCA’s concept and interpretation regarding the application of the Implementing Regulations for Zakat Collection issued on 19th Sha’ban 1445H For guidance on any specific transaction, you can visit the official website of ZATCA at zatca.gov. sa, which contains a wide range of tools and information designed specifically to assist Zakat payers, including visual instructional materials, all relevant data, and responses to frequently asked questions (FAQs). 2. General Concepts of Zakat and Its Calculation Methods a. The Regulations: The Implementing Regulations for Zakat Collection issued by Ministerial Resolution No. (1007) dated 19th Sha’ban 1445H/29th February 2024G. b. Financing Activities Zakat payer: Any Zakat Payer in the form of banks, and financing and refinancing companies, licensed by the Saudi Central Bank (SAMA); and finance funds licensed by the Capital Market Authority, during the Zakat Year. c. Institution: The Saudi Central Bank. d. Zakat Collection: The process by which the State calculates Zakat on funds subject to Zakat, collects it from the liable Zakat payer, and transfers it to the competent authority for disbursement. Zakat collection is one of the State’s duties. The Prophet (peace be upon him) used to send collectors every year to collect Zakat from liable Muslims. At present, this responsibility is carried out on behalf of the ruler by ZATCA in accordance with relevant laws and regulations. ZATCA has issued regulations governing Zakat collection and provides high- quality services to assist Zakat payers in fulfilling their obligations. e. Activity: Any act performed for the purpose of continuously and regularly generating profit under a license issued by the relevant entities, or which requires a license by the relevant entity prior to its performance, as per the relevant laws and regulations applicable in the Kingdom; whether commercial, vocational, service, industrial, or other activity. f. Zakat payer: A person who is subject to the provisions of the Regulations and practices an activity, or who issued a license to conduct said activity. g. Resident: A natural or legal person meeting residency requirements stated in Article 4 of the Regulations during the Zakat Year. h. Non-Resident: Any person who does not meet the criteria of a Resident. i. Zakat Year: A Zakat Payer’s fiscal year, irrespective of Hijri or Gregorian Calendars, short or long, or at the commencement or closing of business dates. Example 1: A company was established on 10th December 2024G (date of issuance of the commercial registration). The incorporation contract stipulated that the first financial year would begin from the date of issuance of the commercial registration and end on 31st December 2024G. Accordingly, the company’s first financial year will be from 10th December 2024G, to 31st December 2024G. j. Accounting Based on the Daily Basis: If the Zakat Year for the Zakat payer differs from the Hijri year, Article 15 of the Regulations stipulates that Zakat should be calculated according to the actual number of days in the Zakat payer’s Zakat Year, using the following formula: Number of days in the Hijri year Number of days in the Hijri year Actual number of days in the Zakat Payer's Zakat Year Actual number of days in the Zakat Payer's Zakat Year x x