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 – The definition of “financing activities” 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 – 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’s funds are considered sources of funds subject to Zakat, except for liabilities that fall due within less than one year.
Article 6 – 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 here.
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