General Manual of Zakat

Items not added to the zakat base: Below are examples of items that are not added to the zakat base: Item Amount Liabilities of the taxpayer classified as short-term and the like, unless it is known that they have financed deductible assets Loans xx Creditors xx Expenses Payable xx Notes payable xx Overdraft account xx Withheld amounts xx Amount payable to related parties xx Controls for Additions to ZB The capital shall be added to the zakat base according to the following controls: ● The opening balance shall be added. ● The capital increase that took place during the year shall be fully added if it is from internal source (equity,...). ● The capital increase during the year shall be fully added if it financed any of the deducted items from the zakat base. ● The increase in the capital, if it does not finance an item deducted from the zakat base, shall be added in proportion to the number of days of the period for the zakat year. As it is deemed among the other sources of funding referred to in Article (41/3/) of the Regulations. Cases of adding capital to the zakat base: Capital is added to the zakat base 1. Full opening balance 3. The increase that has not financed deductibles shall be added in proportion to the number of days 2. Full increase during the year in the two cases: If it is from internal source If it financed a deducted item Example (11): A company made purchases on credit during the year in an amount of SAR 10,000,000 on 01 / 07 / 20XX AD, as follows: 1. SAR 3,000,000 transfer from the general reserve. 2. SAR 7,000,000 increase in the capital from the partners from which SAR 5,000,000 is used to purchase a new production line, and SAR 2,000,000 to finance the purchase of goods and raw materials. What amount should be added to ZB? 1. The full amount of SAR 3,000,000, which is the increase made from the general reserve, shall be added to the zakat base because it is an internal transfer from a component of the equity. 2. An amount of SAR 5,000,000, which is the increase made to finance the purchase of a completely new production line, shall be added to the zakat base because it has financed deductibles. 3. The amount of the bond loan obtained is added to ZB (SAR 2,000,000) in proportion to the number of days on the basis that it is one of the other financing sources, and it is deemed a long-term obligation on the taxpayer, and therefore, an amount of SAR 1,000,000 shall be added, as calculated below, with the obligations not exceeding the amount of deductions from ZB as follows: Number of Days Left until End of the Fiscal Year Increase Amount Number of Days of the Year (365) Reserves: ● They shall be added to the balance at the beginning of the period if the balance remains until the end of the year, and if the balance was disposed of during the year, such as cash distribution and others, then the part that was disposed of should not be added to the base. ● If the reserves are transferred to an equity account, they shall be added to the zakat base for the entire period within the equity.