Saudi Fund Zakat Base and Unitholder Calculation

Calculate the fund base before applying the investor’s share

Article 78 of the Zakat Collection Regulations, 1445H, calculates the unitholder’s Zakat by multiplying the fund’s Zakat base by the investor’s ownership percentage and the applicable Article 15 rate. The unit’s market value or accounting return is not automatically the underlying base.

This mechanism supports the ordinary non-trading fund-investment deduction under Article 77. Financing funds and qualifying unified returns have separate scope provisions. ZATCA’s August 2024 investment-fund guideline explains the calculation, but the controlling Arabic regulation and the actual facts remain essential where a translation or example is inconsistent.

Reconcile net assets attributable to unitholders

Article 78(2)(a) brings closing net assets attributable to unitholders into the fund-base calculation under Article 23. Use the amount shown at the fund’s financial year-end, supported by a reconciliation of the movements. Do not automatically replace it with gross assets or the investor’s acquisition cost.

Official example: section 3.7.1 of the fund guideline starts with SAR 2 million, adds SAR 150,000 profit and SAR 500,000 subscriptions, and deducts SAR 100,000 distributions and SAR 400,000 redemptions. Closing net assets are SAR 2.15 million, the amount identified for addition on the example’s facts.

Dariba recommendation: reconcile subscriptions, redemptions and distributions to the unit records and financial statements. Their effect on net assets is different from the classification of the fund’s underlying investments as trading or non-trading.

Apply the liability rules to their actual classification and substance

The guideline’s section 3.7.1 applies Article 29 to relevant liabilities, including non-current borrowings and qualifying obligations. Current liabilities are not simply added in full. Examine the specified matching, excess-current-liability and substance conditions, together with the relevant addition limits.

Article 78(2)(f) specifically addresses a fund using current/non-current presentation that deducts a qualifying current asset. The corresponding current-liability addition is required under Article 25 where applicable. A deductible asset and the liability consequence should be considered together.

Dariba analysis: a provision label does not establish that every reserve is a debt to be added on the same basis. Identify whether it represents an established obligation, who it is owed to and how the actual regulation treats it. Reconcile classifications instead of treating the whole liabilities section as one number.

Reconcile adjusted profit without adding the whole profit twice

Article 78(2)(e) adds the difference between adjusted net profit or loss and the book result. The controlling Arabic provision refers to Articles 62, 63 and 64. The translated regulation’s inconsistent reference should not replace those actual provisions.

Official example: section 3.7.1 of the fund guideline uses SAR 1 million book profit and SAR 1.2 million adjusted profit. The adjustment difference is SAR 200,000. It is not a separate instruction to add SAR 1.2 million in full on top of closing net assets already reflecting the book result.

Custody, management, oversight and audit fees are examples identified in Article 78, subject to the applicable expense conditions. An example of an acceptable category does not establish that every invoiced amount qualifies regardless of evidence or actual purpose.

Test deductions asset by asset and distinguish fund-of-funds holdings

Qualifying fixed assets, intangibles, property and other investments require their actual deduction provisions. Article 78(2)(d) addresses non-current investment property not held for sale; it does not turn every property development or trading asset into a fixed-asset deduction.

Article 78(2)(b) specifically treats the fund’s non-trading investments in other funds under the Article 44 external-investment framework. This is a rule for fund-of-funds holdings, not a statement that every domestic share held by a fund becomes a foreign investment.

Section 3.7.3 explains the separate Zakat calculation and certification for those underlying investments. A single accountant’s certificate can encompass the main and underlying funds where the requirements are met. The economic layers must still be calculated, with no omission or duplication of Zakat.

Apply Article 79’s minimum-base reference with its conditions

Article 79 refers to Article 27 whether profits are distributed or retained. A cash distribution is therefore not the test of whether the investment has a relevant minimum base.

The full Article 27 calculation matters. It is not an unconditional instruction always to replace a smaller base with the whole adjusted profit: its conditions include the comparison involving non-deducted assets and the book-to-adjusted-profit difference. Where both the base and adjusted result are negative, Article 27’s actual no-base rule also needs consideration. A positive base can remain relevant despite an adjusted loss.

Official illustration: section 3.6.2 of the fund guideline uses SAR 2 million additions less deductions and SAR 10 million adjusted profit, selecting SAR 10 million on its stated facts. Preserve the illustration’s assumptions rather than turning it into a formula that ignores the rest of Article 27. The guideline’s FAQ 11 also confirms that a negative base does not automatically prevent an otherwise qualifying investment deduction.

Use the actual fund-year length and consistent rounding

Article 15 and section 3.6.2 distinguish the Hijri-year rate from the actual-day calculation for another financial year. Do not apply a flat 2.5% to every Gregorian-year amount or substitute the investor’s different year length for the relevant fund calculation.

Official illustration: section 3.6.2 uses a SAR 40 million fund base, 5% ownership and the stated factor 2.5% × 365 ÷ 354, producing approximately SAR 51,554. The guide labels the example 2024 while using 365 days. A full calendar year in 2024 actually had 366 days; retain the published result only as a 365-day illustration.

Dariba recalculation: with the same base and share but 366 actual days, 2.5% × 366 ÷ 354 gives approximately SAR 51,695. Confirm the actual relevant period and apply the prescribed year basis. Preserve precision until the appropriate final rounding.

Connect the investor’s charge to the supporting records

Establish the ownership percentage from the actual unit information and reconcile it to the investment reported. The fund’s information return, audited statements, underlying calculations and the investor’s chosen evidential route should support one consistent result.

Dariba recommendation: retain a calculation schedule separating the fund base, any separately calculated underlying-fund Zakat, the ownership share, the applicable rate and the final amount paid. Explain different year-ends and any approved data-unavailability treatment. A one-line percentage applied to the investor’s closing asset balance is not an equivalent calculation.

The equity-fund monthly-ratio guide explains the specific Article 78 rule for splitting a qualifying equity fund’s underlying investments. That rule can materially change the deductions feeding this calculation.