Zakat Base Addition

Purpose of the Guideline This Guideline includes clarifications of procedures and instructions related to addition items of the Zakat base and the detailed rulings ralated to them. It helps to form a clear vision and provides detailed guidance regarding the handling of addition items of the Zakat base, in addition to presenting practical application cases related to this matter. This Guideline represents the concept of the authority and its interpretation regarding the application of the Implementing Regulation for Zakat Collection issued by the Minister of Finance's Decision No. (1007) dated 19/8/1445 AH. For guidance on any specific transaction, you can visit the official website of the authority (ZATCA.gov.sa), which contains a wide range of tools and information specially designed to assist taxpayers, including visual guidance materials, all relevant data, and responses to frequently asked questions. Key definition 1. Sources of Funds Liabilities and equity financing for the assets of the entity. 2. Reclassification A procedure outlined in the regulation requires the reclassification of liability items to another group in the financial statements according to the provisions of the regulations. 3. Fair Value The price received to sell an asset or paid to transfer a liability in an statutory transaction between market participants at the measurement date. 4. Adjusted Net Profit The net book profit after it has been adjusted by the regulation’s requirements, such as unaccepted expenses or undeclared revenues. 5. Adjusted Net Loss The net book loss after it has been adjusted by the regulation’s requirements, such as unaccepted expensesorundeclaredrevenues. 6. Accepted Expenses Expenses that the regulation accepts to be deducted absolutely or under specific conditions stated in the regulation. 7. Instruments or Bonds Securities issued by governments or corporations to raise funds from investors for a specified period with a predetermined maturity date. 8. Deferred Tax Liability Income tax amounts that will become due in future periods related to taxable temporary differences. 9. Debtors and Creditors Partners’ Loans Amounts owed to or by partners, excluding capital and carried forward or accrued profits.