Saudi Arabia: A chance to apply FY19 Zakat By-law retroactively
01 November, 2022
In brief
As part of ZATCA’s continuous efforts to facilitate the transactions of Zakat and taxpayers; MR No. 13957 dated 23 Rabi I , 1444 AH corresponding to October 19, 2022 has been issued to give Zakat payers a chance to apply the latest Zakat by-law retroactively to the years starting before January 1, 2019 (subject to certain criteria).
It is worthwhile mentioning that the latest Zakat by-law was issued by MR 2216 dated 7 Rajab 1440 AH corresponding to March 14, 2019, and is applicable to fiscal years starting on or after January 1, 2019.
In detail
Overview of the MR No. 13957
The MR allows Zakat payers filing their returns, based on accounting records, to get the benefit of applying the provisions of the latest Zakat by-law to the fiscal years starting before January 1, 2019.
The latest Zakat by-law issued by MR 2216 is originally applicable to the fiscal years started on or after January 1, 2019.
- Applying the Zakat by-law issued by MR 2216 to the fiscal years starting before January 1, 2019, is subject to certain criteria as explained below.
Cases covered by the MR No. 13957
Zakat payers who are submitting their returns (for the years starting before January 1, 2019) following the effective date of the MR (i.e., after October 19, 2022).
In case there is an ongoing inspection by ZATCA for fiscal year(s) starting before January 1, 2019.
- In case there is no final/non-appealable case/ruling issued for the fiscal year(s) started before January 1, 2019.
Important note about the MR No. 13957
Zakat payers shall not be entitled for any refund/credit of Zakat differences resulting from the application of the MR.
Criteria of applying the MR No. 13957
The application request should be submitted within 60 days, the first day of the 60 days will depend on the case as follows:
|
60 days to be counted from October 20, 2022 |
|
60 days to be counted from October 20, 2022* |
|
60 days to be counted from following day to date of the inspection notification |
In case the last day of the 60 days falls within a public holiday, the period automatically extends to the first working day following the public holiday.
2. A Zakat return according to the provisions of Zakat by-law issued by the MR 2216 should be enclosed with the application request.
3. Zakat payer should withdraw his/her appeal with respect to the fiscal year for which the application request is submitted within (10) days from the date of fulfilling all the application criteria.
4. No revised Zakat return has been submitted following the effective date of this MR, with respect to the year of the request.
5. ZATCA’s ruling for the year of the request is not final or unappealable.
_________________________________________________________
*The count of the 60 days ends by the earliest of 60 days elapsed or ZATCA’s ruling becomes unappealable.
The Takeaway
Zakat payers should assess their Zakat position for the open fiscal years starting before January 1, 2019 to identify the potential opportunities of closing these years with the most efficient Zakat burden.
Related content
Contact us
Chadi Abou Chakra
Middle East Indirect Tax Network Leader, PwC Middle East
Tel: +966 11 211 0400 Ext: 1858
Ebrahim Karolia
Partner, International Tax and M&A Services, PwC Saudi Arabia
Tel: +966 11 211 0400 ext. 1771
Guido Lubbers
ITX Partner | TLS Middle East Consumer Markets leader, PwC Middle East
Tel: +966 54 110 0432
Follow us
