Saudi Arabia – Shura Council approves new Zakat regulations In June 2014, the Saudi Shura Council approved draft regulations on the calculation and collection of Zakat on commercial and professional activities. Among other changes, the regulation imposes Zakat on immovable properties and real estate held for trading or leasing purposes, including vacant or developed land, regardless of whether such properties are owned by individuals or legal entities. This change aims to encourage traders holding properties for trading (i.e. speculation) to sell these properties, as they will have to pay the Zakat even if no sale occurs. The supply of land would then increase and the prices would be reduced. Other elements of Zakat base include, among other things: cash and bank deposits gold and silver stock of goods and raw materials investment in financial securities kept for trading receivables from others, if they resulted from cash lending or trading non-trading investments in sukuks (Islamic bonds) and debt securities. Fixed assets are not included in Zakat base. Zakat applies at the rate of 2.5 percent, and its taxable period is the Hijri (lunar) year. For Zakat payers wishing to adopt the Gregorian year, the rate is 2.577 percent. The Regulations are pending the approval of the Council of Ministers.
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