Build the Zakat Declaration (Saudi Arabia)

Skill: Convert financial-statement figures into a ZATCA Zakat declaration

Region: Saudi Arabia (المملكة العربية السعودية) Category: Tax — Zakat (الزكاة) Does: Takes audited financial-statement figures and computes the Zakat base and Zakat due for the annual Zakat declaration filed with ZATCA, for Saudi/GCC-owned entities (and the Saudi/GCC-owned share of mixed-ownership companies). System: ZATCA portal (annual Zakat declaration)

Zakat is levied at 2.5% of the Zakat base for Saudi/GCC-owned entities; non-Saudi (foreign) ownership shares are subject to corporate income tax (20%) instead, and mixed companies split the base by ownership. The Zakat base is computed by the net-worth (sources-of-funds) method: add equity and long-term liabilities, deduct fixed/long-term assets and the prior-year-loss/adjustment items, with the floor of adjusted profit. The declaration is filed within 120 days of the financial year-end. Rules, deductible items and the exact form differ year to year.

When this applies

• You are a Saudi/GCC-owned entity (or the Saudi/GCC share of a mixed company) filing the annual Zakat declaration with ZATCA.
• Wholly non-Saudi/non-GCC owners file the income-tax declaration instead; mixed companies apportion the Zakat base and the tax base by ownership percentage.
• The declaration is built from the closing trial balance / audited financial statements for the Hijri or Gregorian financial year actually adopted.

Input data required

Zakat base computation (net-worth method)

Zakat base = (additions) − (deductions)
  Additions:
    + capital, reserves, retained earnings, opening provisions
    + long-term liabilities (loans funding deductible assets)
    + adjusted net profit for the year
  Deductions:
    − net book value of fixed assets
    − long-term/deferred assets and qualifying investments
    − accumulated losses brought forward
Zakat base is then floored at the adjusted annual profit:
  Zakat base = max(net-worth base, adjusted profit)
Zakat due = Zakat base × 2.5%   (≈ 2.577% if a Hijri-to-Gregorian day adjustment applies)

Calculation rules

• Amounts in SAR.
• Rate: 2.5% of the Zakat base for a 354-day Hijri year; a small uplift (~2.5773%) applies where a 365-day Gregorian year is used.
• The Zakat base cannot fall below the adjusted net profit for the year — if the net-worth result is lower, use adjusted profit.
• Deduction of an asset generally requires that it was financed from the deductible sources; non-qualifying or non-business assets are not deductible.
• Mixed ownership: Zakat on the Saudi/GCC base share; corporate income tax (20%) on the foreign profit share — file both bases consistently.
• File and pay within 120 days of year-end; ZATCA issues the assessment/restriction (Zakat certificate) used for government dealings.

Worked example (wholly Saudi-owned, outline)

Zakat declaration — TIN 300011223400003 — FY 2025 (12 months)
  Sources of funds (additions):
    Paid-up capital                 10,000,000.00
    Retained earnings                3,500,000.00
    Reserves & added-back provisions 1,200,000.00
    Long-term loans                  4,000,000.00
    Adjusted net profit              2,800,000.00
    Subtotal additions              21,500,000.00
  Deductions:
    Net book value of fixed assets  -9,000,000.00
    Long-term investments           -2,500,000.00
    Subtotal deductions            -11,500,000.00
  -----------------------------------------------
  Net-worth base                   10,000,000.00
  Adjusted profit floor             2,800,000.00
  Zakat base = max(...)            10,000,000.00
  Zakat due  = 10,000,000.00 × 2.5% = 250,000.00

Filed on the ZATCA portal within 120 days of the financial year-end.

Validation checklist

• Current ZATCA Zakat rules and form used; rate 2.5% (or the Gregorian-year uplift) applied
• Zakat/TIN number and financial year (Hijri/Gregorian) correct; ownership split recorded
• Additions tie to capital, reserves, retained earnings, long-term liabilities and adjusted profit per the financial statements
• Deductions limited to qualifying fixed/long-term assets and investments financed from deductible sources
• Zakat base floored at adjusted net profit (use the higher of net-worth base and adjusted profit)
• Mixed companies: Zakat on the Saudi/GCC share, corporate income tax 20% on the foreign share, both filed consistently
• Figures reconcile to the audited financial statements; filed and paid within 120 days of year-end

Last updated: 2026-06-04 — confirm the active schema version, field codes, and ZATCA requirements against the current Zakat, Tax and Customs Authority specifications before use.