Saudi Arabia approves controls for collecting full Zakat from all companies, institutions

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Saudi Arabia’s Minister of Finance and Chairman of Zakat, Tax and Customs Authority (ZATCA), Mohammed Al-Jadaan, approved the controls for collecting all Zakat from all companies, institutions, and others, provided that this decision applies to fiscal years starting on or after January 1, 2023.

The decision stipulates that wholly state-owned companies are subject to the collection of Zakat when the company has a commercial register, and its scope of work can be performed by the private sector, based on the company's articles of association, memorandum of association, or any other legal document, as reported by Umm Al-Qura Newspaper.

Under this decision, wholly state-owned companies are exempted from Zakat collection for the fiscal year in which they achieve any of the following controls:

1- All the company's investments must be outside the Kingdom.

2. The company's budget shall be financed by the State Treasury and the following conditions shall be met:

- The nature of the company's work should be service for the purpose of supporting government agencies in performing their work.

- Most of its customers should be government agencies.

- A non-for-profit organization.

- Sales to the private sector should not exceed (10%) of the total sales.