Zakat in Saudi Arabia

What is Zakat in Saudi Arabia

Zakat is a religious obligation on companies owned by Saudi or GCC nationals, calculated at 2.5% of the annual zakatable base. It is regulated by the Zakat, Tax and Customs Authority (ZATCA) and filed annually through the ZATCA electronic portal.

The fundamental distinction between Zakat and Corporate Income Tax:

• Zakat applies to Saudi and GCC partners at 2.5%
• Corporate Income Tax applies to foreign partners at 20% of net profit
• Mixed-ownership companies are assessed per partner according to nationality

Motaded's Zakat Services

1. Zakatable Base Calculation

We review the client's audited financial statements and calculate the zakatable base in accordance with the Zakat Collection Regulation, including: capital, retained earnings, provisions, long-term liabilities, zakatable assets, and investments. The outcome is a precise declaration that determines the payable amount without subjective judgment.

2. Filing on the ZATCA Portal

Our certified public accountants, licensed by the Saudi Organization for Chartered and Professional Accountants (SOCPA), handle the actual filing on the ZATCA portal under an official certified signature. This signature is a mandatory requirement for ZATCA to accept declarations from companies exceeding the prescribed revenue threshold.

3. Responding to ZATCA Objections

When ZATCA raises objections on declaration items, we handle the technical documented response within the statutory window (60 days) and follow the case to closure through either amicable resolution or the General Committee for Tax Disputes Resolution.

4. Corporate Income Tax for Foreign Partners

We serve foreign and mixed-ownership companies in calculating Corporate Income Tax (20%) for non-GCC partners under the Saudi Income Tax Law, with annual filing and full utilization of available exemptions under the Double Taxation Treaties the Kingdom has signed with more than 50 countries.

5. E-Invoicing and Ongoing Compliance

Integration of the e-invoicing system (FATOORA) with the company's ZATCA account, and ongoing monitoring of monthly VAT compliance, with full alignment with accounting services and internal audit.

Statutory Deadlines

Zakat and Corporate Income Tax declarations are filed within 120 days from the end of the company's fiscal year. Late filing incurs a penalty of 1% per month on the outstanding amount, accruing until full payment.

Who Needs Our Services

• New companies established through our business setup service filing their first declaration
• Mixed-ownership companies (Saudi + foreign) that require separating Zakat from Corporate Income Tax
• Companies whose declarations have been objected to by ZATCA and require a technical response
• Foreign branches subject to Corporate Income Tax requiring annual filing

Get Started

For an initial assessment of your Zakat and tax position, schedule a consultation session with our team or contact us directly.