The General Authority of Zakat and Taxes (the Authority) is responsible for the collection and collection of Zakat. Zakat collected by the General Authority of Zakat and Taxes will be deposited in the Social Security Account, which will distribute this to the poor and needy in accordance with Royal Decree No. Established with Ministerial Resolution No. H, as one of the government bodies under the Ministry of Finance, and was entrusted with the task of collecting zakat.
Follow up the Zakat payer and take the necessary actions to ensure the collection of the amounts due. Work to increase the awareness of the Zakat payer and strengthen the rate of voluntary commitment and ensure its compliance with the guidelines and guidelines issued by. This guide presents the concept and interpretation of the Authority for the implementation of the Implementing Regulations for the collection of Zakat issued on 71440/7/H.
It is not intended to include all the relevant provisions in the Zakat Levy Implementing Regulations. At present, it is carried out by The General Authority of Zakat & Tax on behalf of the State in accordance with the relevant laws, rules and regulations.
Zakat year
The number of actual days of the Zakat year for the Zakat payer Number of Hijri birthdays (354).
Business activities
Terms of obligations and their impact on Zakat
Guidelines for adding Long-Term Obligations to the Base
Guidelines for adding Short-Term Obligations to the Base
Zakat Declaration
A form issued by the General Authority of Zakat and Taxes, which contains a number of elements and items, must be completed and submitted by every Zakat payer. The purpose of the declaration and its submission is to show the amount of the subject's zakat base and enable the Authority to make an assessment in accordance with the declaration data.
Assessment
Commercial Books
Methods of Zakat Calculation for Companies
The value of the entity's non-deductible assets, which are deducted in accordance with the terms of the regulations. The value of Zakatable assets in other entities such as: (investments in shares of Saudi companies). Zakat base = All sources of internal funds (capital, reserves and adjusted net profit for the year) + external sources of funds that do not exceed deductibles (long-term liabilities and liabilities that finance deductibles) - or - non-deductible assets - Rentable assets or adjusted net profit for the year, whichever is greater.
Zakatable assets - Non-zakatable assets .. deductible assets A) Both external sources and deductible assets B) Internal sources. External funding sources are first added to the base to satisfy with deductions, not exceeding the total value of the deductions, and then internal funding sources are added. Therefore, in the example above, long-term liabilities were added for the entire basis because they are less than the deductions, and then equity was added.
Deemed Calculation
The Basis of Zakat Calculation
- Identify Zakat Base for Zakat Payer Maintaining Commercial Books
- Components of Zakat Base (Additions)
The Zakat basis for the Zakat payer who maintains commercial books will be determined according to the Authority's methodology in collecting Zakat as explained in Section 2 of this guide(1). Under this method, the internal sources of the Zakat payer's money and the part of his external money sources used in financing deductible assets are added to the Zakat base (additions), while the non-Zakatable assets are deducted from the Zakat base. (deductions)(2). Additions to the Zakat base for the Zakat payer who maintains business books consist of internal sources of funds (equity) and external sources of funds that have financed deductible assets(3).
Calculation of the Base
- Concepts Related to Additions
Definition of Zakatable funds financed from internal sources of funds Set-off of deductible funds with liabilities to them Fulfillment of deductible funds, including liabilities that he used. The authority's method for calculating the zakat base is based on the identification of all sources of internal funds and what financed the deductions from sources of external funds. Obligations that are known to have financed deductible assets, such as: loans for the purchase of a fixed asset.
Indirect calculation of the Base
- What is added to the Zakat Base
- Items to be excluded from Zakat base
- Guidelines for Addition to Zakat Base
- Items of Zakat Base (Deductibles)
- Concepts related to deductions
- Items to be deducted from the base
- Guidelines for Deduction from the Zakat Base
- Items that are not deducted from the Zakat base
- Other general guidelines regarding Zakat base
- Practical Examples
- Adjustment to the Result of Business
- Expenses that may be deducted
- Non-deductible Expenses
- Education Sector
- Definitions related to the sector Sector definition
- Practical Examples
- Appendix: Frequently Asked Questions (FAQ)
The capital increase throughout the year is added if it finances one of the deductible items of the zakat basis. The amount of SR, which is the increase taken from the general reserve, will be added to the Zakat base as it is an internal transfer of a component of equity. To be added to the basic reserve at the beginning of the period, if there is still a balance at the end of the year.
If reserves are transferred to one of the equity accounts, they are added to the basis for the entire period within equity. They will be added to the Zakat base on the opening balance of the period minus the dividends paid during the Zakat year. Current year dividends are considered one of the negative additions to the zakat base if they exceed the balance of retained earnings.
To be added to the basis at the beginning of the period minus dividends paid during the period. Obligations of (354) days and more, as well as obligations of (354) days that overlap between more than one Zakatable year; will be added to the base in proportion to the number of days in the zakat year. The total amount of liabilities added to the Zakat base as stated in the above items should not exceed the total deductions from the base.
The obligations of the Zakat payer and the equivalents mentioned in the above additions will be added to the Zakat base. The total amount of obligations added to the Zakat base as mentioned in the above items should not exceed the total. Knowing the end of the fiscal year is how it determines what should be added to the basis.
The change in fair value calculated in accordance with paragraph (6) of Article VI of the Regulation shall be added to the components of the Zakat base. The company is entitled to deduct the cost of the project (SAR) from the Zakat base for this year. The fair value of the investments in Al Salam Company amounted to SAR 1,000,000 at the beginning of the Zakat year.
The expenses are related to the business of the zakat payer and do not relate to personal expenses or other activities unrelated to the zakat payer. Remunerations paid to the president, vice president and members of the board from the owners or
FAQ pertaining to the Zakat base
The zakat payer reports written-off debts as income when those debts are recovered. Is it permissible for the owner of the entity to deduct his wages and allowances from the zakat base. Salaries and allowances of the owner of the company, regardless of whether it is an independent individual entrepreneur, a capital company or a company of individuals, and the remuneration paid to the chairman of the board of directors of the entity, his deputy and members of the board are taken into account. as expenses that can be deducted, provided that the wages and allowances of the owner of the entity are registered in the social insurance and that the benefits cannot exceed those paid to independent persons.
How is capital growth calculated when it is not known to have financed a deductible asset. Capital growth, which is not known to have financed a deductible asset, will be added, according to the number of days, as a source of other sources of financing and will be treated as a liability for Zakat payers and therefore added without past the amount of deductions from the base. How is the payer of zakat calculated in case the fiscal year is longer than the Hijri year (354 days).
Zakat is calculated based on the actual number of days in the year by dividing two and a half percent (2.5%) by the number of days in the Hijri year (354 days) multiplied by the actual number of days in the Zakatable year, excluding adjusted net profit, which is subject to zakat at the rate of two and a half percent (2.5%) for the year. Number of actual days in the Zakatable year for the Zakat payer Number of days in the Hijri year.
