This guideline is an unofficial English translation of the Arabic guideline and is provided for informational purposes only. The Arabic guidelines published on the GAZT website (www.gazt.gov. sa) remain the only official version and prevail in case of any conflict between the two languages. This is not a legal document and the information in this booklet is for guidance only and is not binding on the authority and does not oblige the user to refer to the zakat implementing regulations and relevant rules and rulings.
The Arabic guideline published on the GAZT's website (www.gazt.gov. sa) remains the only official version and will prevail in the event of any conflict between the two languages.
Introduction
The Zakat proceeds collected by The General Authority of Zakat & Tax shall be deposited into the Social Security Account, which shall distribute this to the poor and needy in accordance with Royal Decree No. created by Ministerial Resolution No. 394), dated 7/8. /1370H, as one of the governmental bodies under the Ministry of Finance, and was entrusted with the task of collecting Zakat. 5 On 20/7/1438H, The General Authority of Zakat & Tax was formed in accordance with Council of Ministers resolution no.
This guide represents the Authority's concept and interpretation of how to apply the implementing regulations for the imposition of Zakat, issued on 7-7-1440H.
Zakat Concepts, Terminology and Calculation methods
Addition of all Zakat assets of the entity, including accounts receivable for the Zakat payer. The value of the Zakatable assets in other entities, such as: (investments in the shares of Saudi companies). This is because the origin of the Zakat payer's Zakat base is that it is based on his legal data which contains the data that allows the Zakat base to be identified.
The authority follows this method for calculating the zakat of zakat payers who are calculated on the basis of an arbitrary assessment.
Shari’ah basis to facilitate the calculation of Zakat on arbitrary-assessment basis
Determine Zakat base for arbitrary-assessed Zakat payers
They are derived from the Zakat payer's total sales (turnover) for the financial year. Any other criteria that the Authority considers to reflect the fact of the Zakat payer's sale. Zakat must be two and a half percent (2.5%) of the zakat base in the formula mentioned in section 4-3.
The Zakat base for one of the Zakat payers accounted for on the basis of the arbitrary assessment method for the year 1441H amounted to SAR 1,000,000. Consequently, the entity is not subject to Zakat in the first financial period from the beginning of the activity, since it is less than 354 days. The Authority will have the right to recalculate the sales of the Zakat payer if it finds that there are higher sales than accounted for.
The authority issued a zakat assessment to one of the zakat payers, which was calculated using an arbitrary assessment method. The authority has the right to change the accounting of the zakat payer from an arbitrary basis to an accounting basis if it is established that the zakat payer keeps business books. The authority found that one of the payers of zakat, which is calculated on the basis of an arbitrary assessment, issued financial statements and submitted them to a financial company to obtain financing.
Accordingly, the Authority will have the right to request the Zakat payer to submit the financial statements and it will be accounted for based on the financial statements. The calculation of Zakat for existing companies is generally based on accounting principles, as the Shariah concepts of Zakat can be applied to companies that prepare financial statements in accordance with the generally accepted accounting principles in Saudi Arabia, while verifying that the Zakat payer complies with the standard of presentation and disclosure and the accuracy of the said notes, such as distinguishing between fixed and operating assets, with the.
Illustrative Examples
Imports of the factory, which operates in the plastics industry, were SAR 110,000 based on import data obtained through the Customs Administration for 1441H, while sales were SAR 140,000 according to export data. The volume of imports of a factory operating in the field of plastics industry - based on import data obtained through the Customs Administration for the year 1441H, amounted to SAR 120,000, while the average number of employees registered with the General Organization for Social Insurance is 20 employees. First: Sales are estimated based on import data or data no.
First: sales are estimated based on import data or sales through POS; whichever is greater. First: sales are estimated on the basis of the number of employees registered with the General Organization for Social Insurance. The engineering consulting office, which has no recorded income in the VAT records, and based on data from the Etimad platform, finds that the office concluded a contract worth SAR 360,000 to supervise the implementation of the project with a government agency, while the average number of employees at JZO was 65 workers.
First: sales are estimated based on the Etimad platform or the number of employees; whichever is greater. Fourth: It is found that the sale in the item (third) is estimated on the basis. The zakat payer has no income recorded in the VAT records and based on data from the Etimad platform, it is established that he has a contract in the amount of SAR 160,000 for the supervision of the implementation of the project with a government entity, while sales through sales outlets amounted to SAR 205,000.
The total purchases of the zakat taxpayer based on the VAT return amount to SAR 250,000, while he has no sales recorded in the VAT return. Since the value of zakat is less than 500 SAR, zakat is calculated according to the minimum limit of zakat (i.e. 500 SAR) based on the rules of any valuation method. The zakat payer has the right to inquire with the authority and obtain a detailed statement of the sales-based calculation mechanism disclosed by the zakat payer in his self-submitted VAT return approved by the authority and in support of the zakat base calculation method.
Fourth: Estimated sales based on sales outlets and approval platform and export data Sales = SAR 174,369.
Calculation of Zakat and Issuance of the Assessment by the Authority
Objection and Appeal Procedures
Full acceptance of the objection: The Authority will then issue a new assessment instead of the first objection assessment and notify the Zakat payer accordingly. Partial acceptance of the objection: The Authority will issue a new assessment instead of the first objection assessment and notify the Zakat payer accordingly. Rejection of the entire objection: The Authority will notify the Zakat payer of the rejection of his objection to the previous assessment issued by the Authority.
In the event of partial rejection or acceptance, the Authority or the Zakat payer may suggest the involvement of the Internal Settlement Committee to resolve the dispute (See item 7.4). The competent judicial authority to which the Zakat payer may appeal against the decisions of the Authority shall be the Dispute Resolution Committee and the Tax Disputes and Appeals Committee, both of which are separate from the Authority. The Zakat payer who wishes to object to the final decisions issued by the Authority must submit the objection directly to the Dispute Resolution Committee within 30 days from the date of the reassessment notice or rejection of the objection, or if 90 days has elapsed from the date of submission of the objection without being decided by the Authority.
The authority's decision becomes final if no objection is received within the specified period. If the zakat payer or the authority objects to the decisions of the Dispute Resolution Committee, the dispute is referred to the Appeals Committee, whose decisions are final, binding and cannot be contested. In the meantime, formal appeals proceedings before the Dispute Resolution Board or Appeals Board are suspended for a request to.
The Settlement Committee will notify the Zakat payer if the request for dispute resolution is accepted or rejected by the Settlement Committee within 30 days from the date of submission of the request. If the Authority is not convinced of the reasons for the opposition of the giver of zakat, and the Authority notifies the payer of zakat about the rejection of his request for issuing the settlement decision.
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Does the Authority have the right to calculate Zakat on the basis of the financial statements obtained from sources other than those mentioned in the Guideline, in case they differ from the data or information of the Authority. The Authority has the right to calculate Zakat based on any information available to it through its sources or any other reliable source of data. Do sole proprietorships with a commercial registration and commercial books have to file a return based on their commercial books or according to the rules of randomly assessed Zakat payers.
Entities that have commercial books are required to submit their Zakat declaration based on the financial statements and commercial book. Any entity that does not have commercial books that reflect the fact of its activity and is under no obligation to issue financial statements. What is the reason for unifying the formula for calculating the basis for the various activities subject to the arbitrary assessment.
This formula has been merged to make it easier for zakat payers to apply, understand and act accordingly. Based on the data and information available to it, the Authority will issue the Zakat Declaration immediately after the end of the financial year, without the need for the Zakat payer to submit a Zakat Declaration (declaration). The Zakat payer has the right to appeal the Authority's assessment within 60 days from the end of the tax year.
