ZAKAT is a religious levy administered as a formal tax by ZATCA. Saudi- and GCC-owned shares pay ZAKAT at 2.5% of the ZAKAT base; non-GCC shares pay corporate income tax at 20% instead. Mixed companies file both, proportionally.
How the ZAKAT base works
The base is broadly: equity + loans financing zakatable assets − fixed assets and similar deductions. It is not simply 2.5% of profit — companies with low profits can still owe meaningful ZAKAT if their equity is large.
Key deadlines
- ZAKAT return: within 120 days of fiscal year-end
- VAT returns: monthly or quarterly by revenue size
- ZAKAT certificate renewal — required for government contracts and payouts
An expired ZAKAT certificate can freeze government receivables overnight. Renewal is a calendar item, not an afterthought.