ZATCA seeks public opinion on draft regulations for Zakat collection from investing in funds

Logo of Saudi Arabia’s Zakat, Tax and Customs Authority (ZATCA)

Saudi Arabia’s Zakat, Tax and Customs Authority (ZATCA) is seeking public opinion on the draft regulations for Zakat collection from investing in investment funds, through Istitlaa Platform until Aug. 31, 2022.

The draft aims to clarify the mechanism of calculating Zakat for investment funds licensed by the Capital Market Authority (CMA), its investors and related regulations.

ZATCA indicated that the owner of the investment unit is subject to the provisions of these regulations if he oversees the activity and is subject to Zakat collection, with the exception of the owner of the investment unit in the financing funds (direct and indirect).

The investment fund and the private purpose facility owned by the investment fund and licensed by the CMA are not responsible for paying Zakat to the authority, provided that the facility does not carry out economic or investment activities outside the scope of work performed by the investment fund to apply its investment policy.

CMA-licensed financing funds (direct and indirect), whose core activity is financing, are subject to Zakat collection under these regulations, the authority noted.

ZATCA called upon all investment funds approved by the CMA to register with the authority for Zakat purposes, before the end of the first fiscal year from approval, except for investment funds approved by the CMA before these regulations came into force. Such funds may register for Zakat purposes during the fiscal year in which the regulations were issued.