Financing Activites

How to prepare and file the declaration The Authority has adopted a special Zakat return form for Zakat payers subject to the Rules for Calculation of Zakat for Financing Activities. It includes the mechanism of calculating the Zakat base and Zakat according to the Rules (Attribution (Altanseeb) method). Gross profit Minimum limit (10% of 4 times gross profit) Cap (10% of 8 times gross profit) 3,000,000 SAR 1,200,000 SAR 2,400,000 SAR Accordingly, the Zakat payer subject to these Rules must complete the form approved by the Authority and the schedule attached with the Zakat declaration. Upon completion of filling out the declaration, the Zakat payer should print out the final form of the declaration, review it thoroughly and verify the information contained therein. The Zakat payer must stamp and sign the declaration and attach the signed copy of the form along with a copy of the audited financial statements in Arabic and upload them to the ERAD system. The declaration is then filed. 3.4.2. How to settle the amounts due under the declaration Upon filing of the Zakat declaration, (ERAD) system issues a direct electronic invoice notification containing the payment number and the total amount of Zakat due under the declaration. The Zakat payer shall settle the Zakat due through a bank transfer through “SADAD” electronic system. Payment shall be made before the expiration of the statutory period mentioned in the above section 9 (120 days from the end of the fiscal year). 4. Zakat treatment of certain items of the statement of financial position in accordance with the Rules for Calculation of Zakat for Financing Activities Item Zakat treatment in accordance with the Rules Assets Cash in hand and cash equivalents Zakatable assets Cash at correspondent banks and ATM If its maturity is more than a year Zakatable assets The statutory deposit with SAMA Non-Zakatable assets Accounts with NOSTRO correspondents Zakatable assets Current Accounts Zakatable assets Money market deposits with SAMA Zakatable assets Other cash balances Zakatable assets Time deposits maturity date after one year or more Non-Zakatable assets Time deposits maturity date after less than a year Zakatable assets Non-interest-bearing deposits Zakatable assets Saving deposits maturity date after one year or more Non-Zakatable assets Saving deposits maturity date after less than a year Zakatable assets Positive fair value of derivatives, which is due after one year or more Non-Zakatable assets Positive fair value of derivatives that are due within less than one year Zakatable assets Investments at fair value through other comprehensive income Fulfilling the conditions stipulated in the regulations and rules. Non-Zakatable assets Investments at fair value through profit and loss Fulfilling the conditions stipulated in the regulations and rules. Non-Zakatable assets Investments at amortized cost Fulfilling the conditions stipulated in the regulations and rules. Non-Zakatable assets Investments in Government Sukuk issued locally by the Ministry of Finance in Saudi Riyals Fulfilling the conditions stipulated in the regulations and rules. Non-Zakatable assets Investments in bonds and treasury bills Non-Zakatable assets Real Estate Investments Fulfilling the conditions stipulated in the regulations and rules. Non-Zakatable assets Investments in subsidiaries Non-Zakatable assets provided that they are subject to the provisions of levying of Zakat in accordance with the Regulations Investments in associates Non-Zakatable assets provided that they are subject to the provisions of levying of Zakat in accordance with the Regulations Investments in joint ventures Non-Zakatable assets provided that they are subject to the provisions of levying of Zakat in accordance with the Regulations Investments in investment funds Non-Zakatable assets, unless subject to the provisions of levying of Zakat in accordance with the Regulations