Zakat Return Filing in Saudi Arabia: The Deadline, the Documents, and What Really Happens When You Are Late

Every first quarter the same two questions reach accounting firms in Saudi Arabia: when is the zakat return due, and what actually happens if we are late? Most of what circulates in answer to the second — ready-made percentage penalties — does not appear in the Zakat Collection Regulation at all. The real consequences are different, and some weigh more than any fine would.

This guide is built on the text of the Implementing Regulation for Zakat Collection (1445H edition) as published in the official gazette Umm Al-Qura on 21 March 2024 (11/9/1445H), which applies to fiscal years beginning on or after 1 January 2024 — with the article number cited for each rule.

Who has to file

Every zakat payer (mukallaf) subject to zakat collection. Under Article 98 the payer must register with ZATCA before the end of its first fiscal year, then file the zakat return together with the documents relied on in determining the zakat base, and pay what is due.

Article 1 draws a distinction that shapes everything that follows:

• Accounts-based payer (mukallaf al-hisabat): one that has financial statements reflecting the reality of its business, or is legally required to issue them.
• Estimated payer (mukallaf al-taqdiri): one that has no such financial statements and is not required to issue them.

Being late with your financial statements does not turn you into an estimated payer. Article 83 allows ZATCA to treat an estimated payer as accounts-based where it finds that financial statements exist, and states that years of delay in issuing them is not evidence that they do not.

The deadline: 120 days from the end of the zakat year

Article 102 requires an accounts-based payer to file its return and pay the zakat due under it within 120 days of the end of the zakat year; where the last day falls on an official holiday, the due date moves to the first working day after it. Payment is made through the SADAD system or another method ZATCA accepts.

In practice: a company with a 31 December year-end has until 30 April (29 April in a leap year). Note that the deadline covers filing and payment together — filing without paying does not stop the clock, and you will see shortly why that matters.

What goes with the return — and who carries the burden of proof

The return is filed on the accounts-based payer form in ZATCA’s electronic system, with the documents relating to the figures reported (Article 102/2). For zakat purposes the standards adopted by the Saudi Organization for Chartered and Professional Accountants (SOCPA) apply to terminology, accounting treatments and financial reports, and ZATCA may adjust a payer’s figures where their classification or presentation departs from those standards (Article 9).

Four rules govern the relationship after filing:

• Arabic: all supporting documents and explanations are submitted in Arabic, by a person with standing (Article 99).
• Response time: when ZATCA requests a document it must state the reason and allow no less than ten working days — unless it is established that incorrect information was submitted with intent to evade (Article 99).
• The burden of proof is yours: the accounts-based payer bears the burden of proving the return is correct; where it cannot, ZATCA may disallow the item or assess by presumption (Article 111).
• Keep the documents for ten years, inside the Kingdom (Article 110) — and ZATCA may obtain data held by any third party without referring to you.

The rate when your year is Gregorian

Zakat is 2.5% of the zakat base for a Hijri year. Where the zakat year differs from the Hijri year — as it does for most companies working on a Gregorian calendar — zakat is calculated by actual days under the formula in Article 15:

Zakat rate = (2.5% ÷ number of days in the Hijri year) × number of days in the payer’s fiscal year

A full Gregorian year of 365 days therefore attracts roughly 2.578%, not 2.5%. A short period of under 354 days is subject to zakat at the start of a business, and not subject at its end.

What actually happens when you are late

The Regulation contains no percentage penalty for late filing or late payment of zakat. What it does contain bites harder over time. These are the four consequences as the text sets them out:

1. Three demands, then enforcement and seizure

Where payment is late, ZATCA sends a first demand for payment within 30 days, then a second within the following 30, then a third within another 30. If the payer does not respond, ZATCA may take all legal measures to compel payment (Article 120), including applying for seizure of the payer’s assets (Article 122). Once collected, ZATCA must halt those measures.

2. Presumptive assessment: ZATCA estimates for you

Where no return is filed, where the payer withholds documents ZATCA has requested, or where ZATCA obtains information affecting the base, it may presume the zakat due on the information available to it (Article 114) — after a warning and the passage of at least 60 days from it (Article 115). A presumption, by its nature, knows nothing of your deductions or liabilities; it knows your VAT-declared sales, your purchases, your imports and your headcount.

3. The reassessment window doubles from five years to ten

This is the heaviest consequence and the least known. As a rule ZATCA may assess, reassess and correct errors within five years of the filing deadline. Article 106 extends that to ten years in cases including:

• filing the return after the statutory deadline;
• filing an incomplete return, or one not on the approved forms;
• not paying the zakat due under the return within the statutory period;
• not filing at all, with zakat computed by presumption.

Put plainly: a single day late in filing or paying leaves that year open to examination and reassessment for five additional years. And a payer that never registered, or that submitted incorrect information with intent to evade, may be reassessed without any time limit.

4. What stops in practice

What a business needs from ZATCA — from the zakat certificate that government bodies and banks ask for when contracting and releasing payments, to the right to object to an assessment — presupposes a filed return and zakat that is paid or under an instalment plan. Being late does not stop your business the next day; it stops it at the first transaction that requires a regular zakat position.

If you are an estimated payer: how your zakat is calculated

The estimated payer has its own chapter. Its zakat base is estimated under the formula in Article 89:

Zakat base = (Sales ÷ 8) + (Sales × 15%)

Sales may not be lower than those declared in VAT returns (including zero-rated and exempt sales) and in real estate transaction tax data. Where the payer has no sales registered for VAT, ZATCA estimates sales at the highest of: average GOSI-registered headcount × SAR 6,000; imports × 115%; purchases × 115%; or sales per point-of-sale data, the Etimad platform, exports and private contracts. If the formula gives less than the capital stated in the commercial register, the registered capital is used instead. The rate is 2.5% (Article 84) and the minimum zakat is SAR 500 (Article 86).

Example: a business with sales of SAR 4,000,000: base = 500,000 + 600,000 = SAR 1,100,000; zakat = SAR 27,500 — about 0.69% of sales, regardless of profit, loss or debt. Which is exactly why moving to accounts-based status, with proper financial statements, is a financial decision and not merely an accounting one: the statements make your base reflect your real position, up or down.

Three tools after filing: amendment, instalments, objection

• Amending the return: if you discover an error you may apply to amend; once ZATCA approves, the amended return must be filed within 30 days. A downward amendment carries two further conditions: it must precede the assessment and fall within the limitation period (Articles 103 and 104).
• Instalments: apply with the amounts due, the reasons you cannot pay on time, the proposed number of instalments and the advance payment; ZATCA replies within 30 days of the file being complete. The plan may not exceed the period the liability relates to, which ZATCA may double. It is cancelled on missing two consecutive instalments or three in total (Articles 118 and 119).
• Objection: filed under the rules of the tax dispute committees; to be admissible, the payer must pay the undisputed items and between 10% and 25% of the disputed amounts, or provide a guarantee (Article 116). An assessment becomes final 60 days after its date if no objection is lodged (Article 117).

How we help

Al-Mousa & Al-Tamimi Certified Public Accountants handles the zakat file from its first step: preparing financial statements under SOCPA standards so that the base reflects your real position, filing the return and attachments on time, answering ZATCA queries within the ten-working-day window, and preparing instalment and objection applications when they are needed — with a ten-year document file you will not have to hunt for at the first examination request.

See our zakat and tax service · Read next: objecting to a ZATCA assessment, step by step · Contact us

Sources: Implementing Regulation for Zakat Collection (1445H edition) — full text in the Umm Al-Qura official gazette; ZATCA’s published copy (PDF); Saudi Press Agency — the Minister of Finance’s approval and the scope of application. This article is general guidance and is not a substitute for advice on a specific case.

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