Minister of Finance approves amending Zakat rules for financing activities

Saudi Minister of Finance Mohammed Al-Jadaan

Minister of Finance, Mohammed Al-Jadaan, approved amending some rules for calculating Zakat on financing activities.

The financing activities definition was amended to read: “Financing activities mean banks and financing companies licensed by the Saudi Central Bank (SAMA), as well as direct and indirect financing funds licensed by the Capital Market Authority.”

Two sub-paragraphs were also added to Article 4 on the sources of funds subject to financing activities’ Zakat, to include net assets of unitholders in direct and indirect financing funds. Except for banks and banks and financing companies licensed by SAMA, all sources of taxpayers’ funds are like the sources of funds subject to Zakat, excluding the liabilities due in less than one year.

The net values reported in audited financial statements at year end shall be approved when calculating the Zakat base for financing rules, except for Article 4/1. This exception does not apply to direct and indirect financing funds.

This resolution will come into effect from the date of publication.