Contents
1. Information and Communication Services Activities
2. Zakat Base Calculation Method
3. Zakat Base Rules
4. Important Items in Financial Position Statement
The Zakat, Tax and Customs Authority (“ZATCA”, “Authority”) has issued this Guide for the purpose of clarifying certain tax treatments concerning the implementation of the statutory provisions in force as of the Guide’s issue date. The content of this Guide shall not be considered as an amendment to any of the provisions of the Laws and Regulations applicable in the Kingdom.
Furthermore, the Authority would like to highlight that the clarifications and indicative tax treatments prescribed in this Guide, where applicable, shall be implemented by the Authority in light of the relevant statutory texts. Where any clarification, interpretation or content provided in this Guide is modified - in relation to unchanged statutory text - the updated indicative tax treatment shall then be applicable prospectively, in respect of transactions made after the publication date of the updated version of the Guide on the Authority's website.
Information and Communication Services Activities
This sector includes the production and distribution of information and cultural products and the provision and means of transport and distribution of such products, as well as the transmission and distribution of data, information and communications technology activities, data processing and other information service activities.
This Sector Includes the Following Activities:
Publishing activities.
Production activities of films, videos, television programs, sound recordings and music publishing.
Programming and broadcasting activities.
Telecommunications.
Computer programming, consultancy and related activities.
Information services activities.
The Authority's Method to Calculate the Zakat Base for Zakat Payers Who Keep Commercial Books
The Authority uses the indirect method (the sources of funds method) to reach the zakat base. This method is based on the following:
(Additions): Adding the zakat payer's internal sources of funds and sources of external funds utilized for the deductible financing.
(Deductions): Non-Zakatable and Zakatable assets are deducted.
Additions:
Capital.
Revenue and advance payments.
Long-term liabilities (maximum total deductions from the base).
Reserves at the beginning of the year.
Retained earnings.
Profit under distribution.
Adjusted net profit.
Provisions at the beginning of the year.
Change in fair value.
Any item utilized in financing deductible asset.
Deductibles: