22Different Activities

Definition of the Sector This sector is defined as the sector specializing in the provision of passenger or freight transport, whether scheduled or not, by railways, pipelines, road, water, or air, along with related activities such as airport facilities, parking, cargo handling, storage, etc. This sector also includes the rental of transport equipment with a driver or operator. It further encompasses postal and courier activities. However, the maintenance and repair of motor vehicles and other transport equipment; construction, maintenance, and repair of roads, railways, seaports, and airports; as well as the rental of transport equipment without a driver or operator, are excluded from this sector. This sector includes the following activities: ● Land transportation and pipeline transport. ● Water transport. ● Air transport. ● Warehousing and support activities for transportation. ● Postal and courier activities. Zakat issues pertaining to the sector Spare parts Spare parts are parts that are used for the maintenance of transport and shipment/cargo machinery, vehicles, and equipment within this sector and are not intended for sale. Spare parts are considered non-zakatable assets and are deductible from the Zakat base as they are not intended for sale in their current state, according to the Implementing Regulations. Example (26): A company operating in air transport has a balance of spare parts shown in the financial statements as of 31 December 2019, amounting to SAR 30,000,000. What is the amount of spare parts to be deducted from the Zakat base? The balance of spare parts inventory shown in the financial statements as of 31 December 2019, amounting to SAR 30,000,000, is fully deductible from the Zakat base as spare parts are considered non-zakatable assets because they are not intended for sale in their current state. The Most Important Items in the Statement of Financial Position for the Transportation and Storage Sector and Their Zakat Treatment Item Item Nature Zakat Treatment Judgment Non-current assets Vehicles and transport equipment (ships, aircraft, etc.) Represent fixed assets used in the transportation and storage sector Deductible assets Deductible from the base as they are non-zakatable assets Locomotives, trailers and refrigeration units Represent fixed assets used in the transportation and storage sector Deductible assets Deductible from the base as they are non-zakatable assets Transport vehicles and tankers Represent means of transport for the products of the entity and its storage operations Deductible assets Deductible from the base as they are non-zakatable assets