1Second Edition | April 2020

Conditions for Submitting a Request for Exemption from Zakat Collection and Obtaining a Certificate of Exemption Issued by ZATCA Article Seven of the Regulations sets out the mechanism and conditions for submitting a request for exemption from Zakat collection, which may be clarified from a procedural perspective, in line with current practice applied by ZATCA, as follows: 1. Where approval is granted for exemption, an information return will be issued, accompanied by the Zakat payer’s audited financial statements, in accordance with Article 17 of the Regulations. Zakat payers to whom the rules apply must submit the Zakat return in Arabic, using the prescribed form issued by ZATCA, with the required attachments, including audited financial statements or a report by a certified public accountant licensed in the Kingdom. The Zakat return and its attachments must be submitted within 120 days from the end of the Zakat payer’s fiscal year, in accordance with Article 102 of the Regulations. The attachments to the Zakat return must also include completion of the Zakat payer’s related- party transaction register, using the disclosure form attached to the return, in accordance with the Transfer Pricing Rules and their subsequent amendments, issued by Resolution of the Board of Directors of the Authority No. (19-1-6) dated 25 Jumada I 1440 AH (corresponding to 31 January 2019). Disclosure must include, inter alia: y Name of the related party. y Nature of the transaction. y Value of the transaction. y Transfer pricing method. It should be noted that Zakat payers who have been exempted remain subject to the same additional transfer pricing requirements applicable to other Zakat payers, as set out in the Transfer Pricing Rules. 2. To submit a request for exemption from Zakat collection, the prescribed application form must be completed and submitted to ZATCA, accompanied by the following supporting documents: y Audited financial statements. y License of the charitable association, non-government organization, or training unit. y A valid commercial registration for any entity owned by the civil society association or organization. y Articles of Association and any subsequent amendments for the entity owned by the charitable association or non-government organization. y Any other information that ZATCA may require to determine the eligibility of the request. 3. ZATCA shall review the request, and in the event of approval, shall notify the Zakat payer through the designated communication channels. Where the request is submitted through the electronic system, it shall be submitted as an information return accompanied by the audited financial statements of the Zakat payer. 3.4.5 Other Statutory Considerations and Requirements 1. A Zakat payer that has been issued a decision exempting it from Zakat collection remains subject to all other provisions of the Implementing Regulations for Zakat Collection, as well as any subsequent amendments thereto. 2. If ZATCA establishes that a Zakat payer granted an exemption has provided inaccurate information or failed to comply with the prescribed conditions, ZATCA may revoke the decision and recalculate the Zakat based on the information available to it, in accordance with Article 23 of the Regulations. 3. The certificate issued by the Zakat payer’s certified public accountant must conform to the template adopted by ZATCA, as set out in the annex to this Guideline(4). (4)  Annex: Model Certificates of the Certified Public Accountant 4. These conditions shall apply without prejudice to the provisions of the Law of Charitable Associations and Non-Government Organizations, the rules governing the establishment of non-profit training units in the field of technical and vocational training, and other relevant laws and regulations in force in the Kingdom of Saudi Arabia, as amended from time to time. 3.5 Non-Profit Companies