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Agriculture, Forestry and Fishing Sector

Zakat, Tax and Customs Authority

First Edition | Dec 2019

Contents

1. Introduction

  1. 1.1 About Zakat

  2. 1.2 Levy of Zakat

  3. 1.3 Application of Zakat Levy in Saudi Arabia

  4. 1.4 Zakat, Tax and Customs Authority

  5. 1.5 Functions of the General Authority of Zakat & Tax

  6. 1.6 Overview of the General Zakat Guide

2. Zakat Concepts, Terminology and Calculation Methods

3. Identify Zakat Base for Zakat Payer Maintaining Commercial Books

  1. 3.1 Components of Zakat Base (Additions)

    1. 3.1.1 Concepts Related to Additions

    2. 3.1.2 What is added to the Zakat Base

    3. 3.1.3 Items to be excluded from Zakat Base

    4. 3.1.4 Guidelines for Addition to Zakat base

  2. 3.2 Items of Zakat Base (Deductibles)

    1. 3.2.1 Concepts related to deductions

    2. 3.2.2 Items to be deducted from the base

    3. 3.2.3 Guidelines for Deduction from the Zakat base

    4. 3.2.4 Items that are not deducted from the Zakat Base

    5. 3.2.5 Other general guidelines regarding Zakat base

    6. 3.2.6 Practical Examples

4. Adjustment to the Result of Business

  1. 4.1 Expenses that may be deducted

  2. 4.2 Non-deductible Expenses

5. Agriculture, Forestry and Fishing Sector

  1. 5.1 Definitions related to the sector

  2. 5.2 Practical Examples

6. Appendix: Frequently Asked Questions (FAQ)

This guideline was issued by the Zakat, Tax and Customs Authority («ZATCA» or «Authority») to elucidate certain treatments regarding the implementation of the statutory provisions in effect as of the date of publication of this guideline. The content of this guideline may not be construed as an amendmentto any of the laws and regulations applicable in the Kingdom.

Additionally, it should be noted that the indicative treatments outlined in this guideline will be carried out by the Authority in accordance with the applicable regulations. Where any Clarification, explanation, or information given in this guideline is modified but the regulation remains the same, the updated indicative treatment shall then be applicable prospectively to transactions completed after the publication date of the guideline on the Authority's website.

Introduction

About Zakat

Zakat is the third pillar of Islam, an essential financial worship in life of every Muslim, as quoted in the Holy Quran. Allah Almighty equated Zakat with Prayers in more than eighty verses, which is one of the most important pillars that distinguishes the Muslim community from others. It is a manifestation of the supremacy of Islamic legislation; as it represents a defining element in fighting poverty and alleviate the suffering of the poor. A vital element in achieving social solidarity.