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May 8, 2023

Saudi Arabia issues amendments to the Zakat Implementing Regulations

  • Saudi Arabia has added and amended some paragraphs of the Implementing Regulations on zakat collection.
  • The amendments to the Zakat Implementing Regulations primarily include changes to employees' housing ownership programs, issued sukuk and bonds, and financial guarantees that are required when submitting objections to the assessments of the Zakat, Tax and Customs Authority.
  • Zakat payers should observe the amendments to claim the eligible deductions as applicable under the respective articles.

Executive summary

The Saudi Arabia Ministry of Finance issued Ministerial Resolution No. 58705 dated 21/9/1444H (12 April 2023) introducing amendments to Articles (5), (6), (8) and (25) of the Zakat Implementing Regulations. This Ministerial Resolution was issued after a public consultation on the draft amendments to the Zakat Implementing Rules, published by the Zakat, Tax and Customs Authority(ZATCA) in February 2023. Ministerial Resolution No. 58705 was published in Saudi Arabia's Official Gazette on 28 April 2023 and is in force from the date of its issuance on 12 April 2023.

Key amendments mainly confirm the deductibility of some items for zakat purposes, to clarify their zakat treatment and to require payments relating to appeals with ZATCA.

Detailed discussion


On 27 February 2023, the ZATCA published draft amendments to the Zakat Implementing Regulations for public consultation. The deadline for receiving recommendations and comments on these amendments was 14 March 2023.

Based on the comments received during the public consultation period, His Excellency Muhammed Al-Jadaan, Chairman of the Board of Directors of the ZATCA and the Minister of Finance, issued Ministerial Resolution No. 58705, to add and amend some paragraphs of Articles (5), (6), (8) and (25) of the Zakat Implementing Regulations, issued through Ministerial Resolution No. 2216 dated 7/7/1440H.

Key highlights of the amendments

  • Article (5) has been amended by adding subparagraphs (e) and (f) to Paragraph (1), which read as follows:

(e) Employee housing owned by a zakat payer

(f) Housing loans paid to employees through the Employees' Housing Ownership Program, if it is evident from their contracts that the financing was made through an interest-free loan or a forward sale without granting the company any financial profits or fees in excess of the principal financing amount.

  • Paragraphs (7) and (8) have been added to Article (6), reading as follows:

(7) With respect to Employees' Housing Ownership Program, the price of the housing unit borne by the employee must not exceed its actual cost to the zakat payer, and the employee should not incur any additional amounts against the loan; this includes cases where the contract is terminated prior to the completion of its term.

(8) For zakat purposes, zakat payers may treat sukuk and bonds issued by them as a capital. In this case, such sukuk and bonds are deducted from the zakat base of the investees, without considering their classification in the financial statements. Zakat payers should not reverse this transaction during the maturity period of the sukuk and bonds.

  • Paragraph (8) has been added to Article (8), reading as follows:

(8) Debt financing cost incurred by the zakat payer on behalf of the employees in Employees' Housing Ownership Program.

  • Paragraph (3) of Article (25) has been amended to read:

(3) To accept the objection on technicalities, the zakat payer should settle at least 10% of the zakat amounts for the items under objection, and not more than 25% thereof, or otherwise submit a financial guarantee for such values. The ZATCA may set the regulatory rules.


Zakat payers should observe the amendments with respect to the eligible deductions from the zakat base relating to the items outlined in Ministerial Resolution No. 58705, as well as the requirement for the acceptance of appeals under the ZATCA's jurisdiction, based on the same resolution.


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

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor


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