The Minister of Finance in the Kingdom of Saudi Arabia has approved additions and amendments to Articles (1,4,6) of the rules for calculating Zakat on financing activities, through the Ministerial Resolution No. 137, dated 22 August 2023, which was published in the Official Gazette (Umm Al Qura) on 22 September 2023.
Article 1 鈥� The definition of 鈥渇inancing activities鈥� is amended to include direct and indirect financing funds licensed by the Capital Market Authority (CMA), in addition to banks and financing companies licensed by the Saudi Central Bank.
Article 4 鈥� The addition of sub-clauses (4) and (5), providing more details on the sources of funds subject to Zakat related to financing activities.
(4) Net assets of unit holders in direct and indirect financing funds.
(5) With the exception of banks and finance companies licensed by the Saudi Central Bank, all sources of the Zakat payer鈥檚 funds are considered sources of funds subject to Zakat, except for liabilities that fall due within less than one year.
Article 6 鈥� Clause (1) is amended to be as follows: The values included in the audited financial statements at the end of the Zakat year are relied upon in net when calculating the Zakat base for financing activities, with the exception of what is stated in sub-clause (1) of Article 4 of these rules, and where this exception does not apply to direct and indirect financing funds.
The publication in the Official Gazette is available .
For detailed discussions on how the proposed amendments can affect your business, please contact our tax team:
Riyadh Office
Tareq Al Sunaid Head of Tax |
Salam Eido Senior Director, Head of Tax - Riyadh |
Sadia Nazir Senior Director, Head of Transfer Pricing and International Tax |
Ali Sainudheen Partner, Domestic Tax |
Stefan El Khouri Partner, International Tax |
Jigna Sampath Senior Director, Transfer Pricing/ Tax Leader, Financial Sector
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Ajay Garg Principal, Indirect Taxes |
Oleg Shmal Director, Indirect Taxes |
Amr Alsaleh Director, Domestic Tax |
Jeddah Office
Faisal Tanvir Partner, Head of Tax - Jeddah |
Anan Sijini Director, Domestic Tax |
Khobar Office
Mohammad Kamran Sial Partner, Head of Tax - Khobar |
Mohamed Gouda Director, Domestic Tax
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Anil Bahl Director, Indirect Tax
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