Documents Required for ZAKAT Calculation in KSA

In the Gulf Cooperation Council (GCC) region, Zakat is an essential component of an organization's financial structure. In the Kingdom of Saudi Arabia (KSA), the Zakat, Tax, and Customs Authority (ZATCA) offers an electronic Zakat collection service. Having its roots in Islam's core beliefs, it is regarded as one of the Five Pillars of Islam. When it comes to enterprises held by Saudi and GCC nationals, zakat is essentially a wealth tax. This blog examines the complexities of Zakat and the complexities required for ZAKAT Calculation in KSA. The process of ZAKAT Calculation entails figuring out how much wealth is susceptible to this required almsgiving in Islam.

Calculating Zakat in KSA  

 Zakat is computed using the net worth of a business, which is known as the "Zakat base." It is equivalent to 2.5% of the organization's Zakat base as per government standards.

 For Example: Let's say a Saudi-owned business has a SAR 1,000,000 Zakat base. The amount owed in Zakat would be calculated as follows: 2.5% * 1,000,000 = SAR 25,000.

Documents Required for ZAKAT Calculation in KSA  

Foreign Ownership

• Using the import customs bayan to set the stated amount in the declaration
• Bills that the associated parties have issued
• Supporting documentation needed to pay for purchases made overseas
• Evidence of any imports done via a third-party 

Local Ownership 

• Bills that the associated parties have issued
• Supporting paperwork needed to pay for local transactions
• Evidence of any purchases done via a third party 

Salaries, wages, and employee benefits

• Payrolls every month via bank transfers
• Employment agreements and their modifications
• Policy administration for allowances and perks Bonus decisions made by the administration 

Services and goods 

• Agreements made with suppliers
• Bills from vendors issued in the Zakat Payer's name
   

Conclusion

Reyson Badger provides Zakat tax and accounting services. We offer annual Zakat and tax computation through our tax consultants. Based on a person's total income over a lunar year, the zakat calculation method determines the amount of charitable gifts mandated by Islamic law.