First Edition | August 2023

Application of Zakat Collection in the Kingdom of Saudi Arabia The collection of Zakat and its disbursement to eligible recipients is one of the basic tasks of the State, as stipulated in Article 21 of Basic Law of Governance, which stipulates as follows: (Zakat shall be collected and spent for legitimate expenses.). Article 7 set forth evidence of the State’s attention to the duties of Sharia and its commitment thereto in general, which includes collecting Zakat and disbursing it to the beneficiaries. It stipulates as follows: (Government in the Kingdomof Saudi Arabia derives its authority from the Book of God and the Sunna of the Prophet (PBUH), which are the ultimate sources of reference for this Law and the other laws of the State). In confirmation of the foregoing, during the reign of the Founder King Abdul-Aziz -may Allah have mercy on him- Royal Decree No. (8634/28/2/17) dated 29/6/1370H corresponding to (6 April 1951), was issued with the order to collect Zakat. The said Royal Decree was followed by many royal decrees confirming the same as well as implementing ministerial resolutions, in addition to the regulations and circulars, including Royal Decree No. (M/40) dated 2/7/1405H, and the Zakat implementing regulations issued by Ministerial Resolution No. (2082) dated 1/6/1438H, Corresponding to (28 February 2017) and the Zakat implementing regulations issued by Ministerial Resolution No. (2216) dated 7/7/1440H corresponding to (14 March 2019), which applies to the Zakat years starting on or after January 1, 2019 for all Zakat payers, except forthose who are accounted for by the discretionary method according to the chapter 4 of the regulations, whereas the regulations apply to their declarations submitted after 31 December 2019. Therefore, the Zakat implementing regulations issued on 7/7/1440H do not apply to the fiscal years prior to this date, and those years are treated in accordance with the regulations and instructions prior to this date. The Zakat implementing regulations has been particularly concerned with clarifying the provisions for Zakat collection on commercial and professional activities, and alike, besides other Zakat funds, the requirements for submitting the Zakat declaration, procedures of the assessment, examination and payment, and their respective terms. The Zakat proceeds collected by ZATCA are received and deposited in the Social Security Account, which is responsible for disbursement to the poor and needy in accordance with Royal Decree No. (1/5/16) Dated 05 / 01 / 1383H corresponding to (28 May 1963), wherein Paragraph (1) provides for: “Zakat shall be collected in full of all joint stock companies, and others, and individuals subject to Zakat.” In addition, Paragraph (2) stipulates: “All amounts collected shall be given to the Social Security Fund.”