Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

December 29, 2022

Saudi Arabia Ministry of Finance issues Zakat Collection Rules for Investment Funds

  • The Zakat Collection Rules for Investment Funds (Fund Zakat Rules) will be effective from 1 January 2023.

  • The Fund Zakat Rules were issued to clarify the zakat calculation mechanism for the Capital Market Authority’s (CMA) approved investment funds (or real estate investment funds) and their investors.

  • Approved investment funds (Funds) in Saudi Arabia should register and file information declarations as per the Fund Zakat Rules.

Executive summary

On 23 December 2022, Saudi Arabia’s Ministry of Finance (MoF) released the Fund Zakat Rules through its Resolution No. 29791 dated 9/5/1444 H to be effective from 1 January 2023.

Under the Fund Zakat Rules, Funds are required to register with the Zakat Tax and Customs Authority (ZATCA) before the end of their first fiscal year in which the Fund Zakat Rules become effective. In addition, Funds are also required to file information returns within 120 days from the end of the zakat year.

A zakat payer, who is an owner of an investment unit in a Fund (Unit Holder), may deduct the value of its investment in the Fund from its zakat base, subject to certain conditions.

Detailed discussion


On 4 August 2022, the draft Fund Zakat Rules were issued for public consultation with comments due by 31 August 2022. Following the public consultation process, the MoF has now issued the Fund Zakat Rules which will be effective from 1 January 2023.

Key elements of the Fund Zakat Rules

Registration and filing of return

Funds are required to register with the ZATCA, although such Funds are not subject to zakat. A Fund must be registered with the ZATCA before the end of its first fiscal year in which the Fund Zakat Rules become effective.

The Fund shall also submit an information declaration with the ZATCA within a period not exceeding 120 days from the end of the zakat year of the Fund, along with the following attachments:

  • Audited financial statements of the Fund approved by a chartered accountant licensed in Saudi Arabia
  • A record of the transactions between related parties associated with the Fund
  • Any other data that the ZATCA requests during the declaration filing period

If the fiscal year of the Unit Holder and the Fund is different, the Fund’s fiscal year will be taken into consideration in the calculation of zakat on investment in the Fund.

Deduction from zakat base of the Unit Holders

The Unit Holder may deduct the value of its investment in the Fund from its zakat base, under the following conditions:

  • Its investment in the Fund is for non-trading purposes.
  • The calculation of zakat is supported by the calculation in the audited financial statements or auditor’s certificate.
  • The Unit Holder settles its share of zakat on its investment.

Zakat calculation

  • The zakat of the Unit Holder shall be calculated according to the following formula:

  • The zakat base of the Fund shall be calculated in accordance with the Zakat Implementing Regulations (2019), considering certain items mentioned in Article 6(2) of the Fund Zakat Rules.

  • The minimum zakat base would be equal to the Unit Holder’s share in the net adjusted profit of the Fund.


The Fund Zakat Rules do not apply to the following:

  • A holder of a unit in a finance fund. A finance fund is an investment fund established for the purpose of undertaking direct and indirect finance activity in accordance with relevant laws and regulations in Saudi Arabia.
  • A holder who owns the entire Fund (directly or indirectly) and has submitted a consolidated zakat return.

Transactions with related party

Transactions with related parties would be subject to Saudi Arabia’s transfer pricing rules.


Investors and Funds in Saudi Arabia should review the Fund Zakat Rules carefully to determine whether such rules apply to them. Where applicable, Funds and investors should make the necessary preparations to meet their obligations under the Fund Zakat Rules. We understand that the ZATCA will issue further guidelines in respect of Fund Zakat Rules in due course.


For additional information with respect to this Alert, please contact the following:

Ernst & Young Professional Services (Professional LLC), Riyadh

Ernst & Young Professional Services (Professional LLC), Jeddah

Ernst & Young Professional Services (Professional LLC), Al Khobar

Ernst & Young LLP (United States), Middle East Tax Desk, New York


The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


Copyright © 2024, Ernst & Young LLP.


All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.


Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.


"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.


Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or Please refer to the privacy notice/policy on these sites for more information.

Yes, I accept         Find out more