1Issue 1 | September 2024

Zakat Payers Subject to Zakat Rules for Financing Activities According to the Implementing Regulations for Zakat Collection 1445H/2023-2024G The Implementing Regulations for Zakat Collection 1445H/2023-2024G were issued by Ministerial Resolution No. (1007) dated 19th Sha’ban 1445H/29th February 2024G and apply to fiscal years beginning on or after 1st January 2024G. These rules apply to banks, financing companies, refinancing companies licensed by the Saudi Central Bank, and financing funds licensed by the Capital Market Authority during the Zakat Year. The method for calculating Zakat for financing activities is based on the Zakat payer’s sources of funds utilized in its Zakatable assets. Zakat Base Calculation Formula The method for calculating Zakat for financing activities is based on the Zakat payer’s sources of funds used in its Zakatable assets, as shown in the following formula: Zakat Base for Financing Activities = Sources of Funds × (Zakatable Assets ÷ Total Assets) Zakat Base for Financing Activities Sources of Funds Zakatable Assets ÷ Total Assets 3.2 Zakat Base for Financing Activities The Implementing Regulations for Zakat Collection have defined the Zakat base as the Zakat payer’s sources of funds utilized in its Zakatable assets. The Zakat base is calculated by dividing Zakatable assets by total assets, then multiplying by sources of funds, according to the following formula: Zakat Base for Financing Activities = Sources of Funds × (Zakatable Assets ÷ Total Assets) The components of the above formula will be explained in detail in the subsequent sections of this Guideline. 3.2.1 Concepts Related to the Zakat Base for Financing Activities The method for calculating the Zakat base for financing activities is based on identifying all Zakat- liable sources of funds as stipulated in the Regulations and multiplying them by the ratio of Zakatable assets to total assets.