ZATCA Seeks Public Input On Zakat For Off-Plan Sale Projects

The Zakat, Tax and Customs Authority (ZATCA) is seeking public feedback on its proposed amendment to the executive regulations for Zakat collection on off-plan sales projects through Istitlaa platform until Jan. 29.

It suggested adding a paragraph that addresses the mechanism for calculating Zakat on off-plan sales projects according to a treatment that considers the nature of these projects. The purpose of the amendment is to clarify the Zakat treatment of off-plan sales projects. ZATCA suggested adding the third paragraph to Article 73 of Real Estate Projects Under Construction, stipulating that Zakat on off-plan sales projects must be treated as follows:

- Off-plan sales projects - licensed by the competent authority based on the regulations in force in the Kingdom - are deducted from the Zakat base according to the following equation whenever the result is more than zero: Deducted from the base = Project balance at the end of the year - Value of additions to the project during the year.

- The equation is applied to each project separately.

- If part of the project balance is classified in the financial statements as current assets and the other part as non-current assets, the deduction resulting from applying the equation contained in paragraph (a) of this article must begin from the non-current part, and the remaining deduction - if any - must be completed from the current part.

- The sources of funds for off-plan sales projects must be added in accordance with Chapter Three of the Regulations.

- Article 25 of the Regulations must be considered when applying the above-mentioned.