Application of the Zakat Regulations Issued by MR. No.

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Summary

The Minister of Finance of Saudi Arabia issued the Ministerial Resolution (“MR”) No. (13957) dated 23 Rabi’ Al-Awwal 1444 AH, corresponding to 19October 2022, allowing Zakat Payers subject to Zakat on accounting records basis, to apply the provisions of the Zakat Regulations issued by the MR No. (2216) dated 7 Rajab 1440 AH to the Financial Years (“FYs”) starting before 1 January 2019 in accordance with the conditions stipulated in the resolution.

It is worth mentioning that the current Zakat regulations issued by MR No. (2216) were only applied by the Zakat, Tax and Customs Authority (“ZATCA”) to FYs starting on or after 1 January 2019.

In detail

The MR’s application to the FYs before 1 January 2019 is as follows:

Applicable	Not Applicable
Zakat declarations submitted after the MR enforcement date (i.e., 19 October 2022), which were not previously submitted.	Zakat payer who is subject to Zakat on deemed basis.
Zakat declarations under ZATCA’s inspection/review.	Zakat payer who files the MR application request after 60 days.
Zakat declarations, where an assessment is issued, however, ZATCA decision is not final and can be objected on or under appeal)	Zakat payer who did not withdraw the objection or appeal related to the relevant FY within 10 days from the date of fulfillment of the application conditions.
	Zakat payer who amended the declaration of the relevant FY after the MR enforcement date.
	Zakat payer who requested the application of the MR for a relevant FY, and then requested to apply the same to previous years of which ZATCA decision is final.

Conditions and requirements for applying the MR:

Submit an application to ZATCA within 60 days (please refer to ZATCA simplified guideline to identify the first day of the 60 days based on the relevant case)
Enclose with the application, the Zakat declaration for the relevant FY, prepared in accordance with the Zakat Regulations issued by the MR No. (2216)
Amending the above declaration after the MR enforcement date, is not allowed.
ZATCA’s assessment covered under the MR, is not final due to the elapse of the objection statutory period, or the issuance of a final uncontested decision.
Withdraw the objection or appeal related to the relevant FY within 10 days from the date of fulfillment of the application conditions.
Zakat payer cannot withdraw the application after submission to ZATCA.
In case the application of MR results in lower Zakat liability than declared previously in the Zakat declaration, the Zakat payer is not entitled to any refund/credit balance.
ZATCA has issued a simplified guideline on its portal, which outlines the details for applying this MR, please click here.

Conclusion

The application of MR might be beneficial for Zakat declarations meeting the above conditions for the years starting prior to 1 January 2019 AD and needs to be evaluated on a case-by-case basis to finalize the zakat position.

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