1Second Edition | April 2020

Procedures for Submitting a Request for Exemption from Zakat Collection with ZATCA by Wholly State-Owned Companies Not Subject to Zakat Collection Ministerial Resolution No. (57732), Clause 3, sets out the mechanism and conditions for submitting a request for exemption from Zakat collection for state-owned companies. These procedures may be summarized and clarified, from a procedural standpoint and in line with current practice before ZATCA, as follows: 1. Submission of the annual return In the event of approval of an exemption, an information return is issued. Companies wholly owned by the State, to which the exemptions provided in the ministerial resolution apply, must submit the Zakat return using the form approved by ZATCA, together with its annexes in Arabic, and attach the audited financial statements or any reports specified by ZATCA. This must be submitted within 120 days from the end of the company’s fiscal year. 2. Completion of the request for exemption from Zakat collection and submitting it to ZATCA together with the Zakat return and other documents Following the submission of the Zakat return by the company, it must contact ZATCA regarding the request for exemption from Zakat collection through the approved communication channels, after completing the request form prepared by ZATCA, as detailed below, and attaching at least the following documents: y A copy of the Zakat return submitted on ZATCA’s website, together with proof of receipt. y Audited financial statements or any other audited reports that may be required by ZATCA. y A valid commercial registration. y The Articles of Association and any subsequent amendments thereto. y Any other data that ZATCA may require to determine the possibility of approving the request for exemption from Zakat collection. If the required documents are not provided within the period specified in the notification, the review will proceed based on the documents submitted. 3. Review of the request by ZATCA and notification of the company in the event of approval If ZATCA approves the company’s request, the company shall be notified through the approved communication channels and will be required to resubmit the return to ZATCA’s website in the form of an information return, together with the audited financial statements of the Zakat payer. In the event of rejection of the request, the Zakat payer will be required to pay the Zakat due pursuant to the Zakat return previously submitted. 3.2.5 Other Statutory Considerations and Requirements If a company owned by a government entity wholly owns more than one other company, each subsidiary must submit its own independent request for exemption from Zakat collection to ZATCA. The companies concerned, to which the exemptions from Zakat collection apply pursuant to the Ministerial Resolution, may not submit a consolidated request for exemption. 3.3 Second: Endowments (Awqaf), and Companies and Institutions Wholly Owned by Endowments 3.3.1 Introduction to the Rules Governing Exemption of Entities Owned by Endowments from Zakat Collection The Regulations, under Section Two, “Persons Not Subject to the Provisions of the Regulations and Exempted Therefrom”, in Article Seven, “Exempted from Zakat Collection”, included the provisions related to the non-subjection of Zakat collection to endowments and to companies and institutions wholly owned by a waqf (an endowment). The following paragraphs set out the relevant rules, with illustrations and clarifications.