Zakat at 2.5%: How It Applies to Saudi, GCC Owners

Zakat in Saudi Arabia generally applies at a rate of 2.5% of the zakat base for a Hijri financial year, covering the shares owned by Saudi nationals and by GCC nationals treated as Saudi nationals. For businesses that follow a Gregorian financial year, the rate is calculated at approximately 2.578% of the zakat base after annualizing the Hijri figure.

For resident companies, zakat applies only to the proportion owned by Saudi and GCC nationals — namely nationals of Bahrain, Kuwait, Oman, Qatar and the UAE. Any foreign ownership is generally treated under Saudi income tax rules on its corresponding share of the business.

How the base and ownership are set

The zakat base is calculated under the applicable zakat regulations and generally cannot be lower than the adjusted net profit. Under the current implementing regulation, the Saudi and GCC ownership percentage is determined at the end of the financial year, and ownership changes during the year generally do not affect that year-end percentage.

The current regulation applies to financial years beginning after 1 January 2024, replacing the previous zakat collection regulation and its related instructions for covered years.

Filing, payment and due dates

Zakat returns are filed through the electronic services portal, and payment is made through the same portal using the issued payment number and approved electronic banking channels. The return and payment are generally due within 120 days after the end of the financial year, subject to the applicable rules.

There is no separate government fee for calculating or filing the return — the amount payable is the assessed zakat liability itself. Returns and assessments relate to a specific financial year, with no separate permit or validity card involved.

For the many family businesses, partnerships and companies across Riyadh, Jeddah and beyond, understanding how the rate and year-end ownership rule work helps owners plan cash flow and meet deadlines without penalty.

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