Saudi corporate taxpayers have a limited-time window to apply the new Zakat Executive Regulations (Bylaws) to prior fiscal years. Under Ministerial Resolution (MR) No. 1463, the filing deadline to request retroactive application has been extended to 31 August 2025. Use this guide to confirm eligibility, assemble documentation, and file a clean, defensible application with ZATCA before time runs out.
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What MR No. 1463 Changes — In One Look
- New deadline: Requests to apply the Bylaws to earlier fiscal years must be submitted by 31 August 2025 (previously 30 April 2025). :contentReference[oaicite:0]{index=0}
- Scope of years: The extension covers fiscal years that began before 1 January 2024. :contentReference[oaicite:1]{index=1}
- Legal hook: MR No. 1463 amends MR No. 947 (the decision that reactivated early adoption of the Bylaws for prior periods). :contentReference[oaicite:2]{index=2}
Why it matters: If the new Bylaws produce a more favorable Zakat computation for your earlier periods, opting in before the deadline can lower historical exposure and align open years with today’s methodology. :contentReference[oaicite:3]{index=3}
Who Should Consider Applying?
- Saudi/GCC-owned entities and mixed-ownership groups with open Zakat years beginning before 2024.
- Businesses with material reconciling items under the old rules (e.g., treatment of reserves, investments, advances, debt, employee housing) that may be clarified or relieved under the Bylaws. :contentReference[oaicite:4]{index=4}
- Groups facing or expecting a ZATCA Zakat audit for pre-2024 years and seeking a clearer framework. :contentReference[oaicite:5]{index=5}
Eligibility & Key Conditions
- Covered periods: Fiscal years that commenced before 1 January 2024. :contentReference[oaicite:6]{index=6}
- Formal application: A request to apply the Bylaws to prior years must be submitted via ZATCA by 31 August 2025. :contentReference[oaicite:7]{index=7}
- Audit status: Application mechanics may differ if an audit has already begun (follow ZATCA’s notice timelines and instructions). :contentReference[oaicite:8]{index=8}
Note: MR No. 1463 is an extension of the early-adoption opportunity that MR No. 947 had reactivated earlier in 2025. :contentReference[oaicite:9]{index=9}
Action Timeline (Now → 31 Aug 2025)
- Week 1–2: Confirm which pre-2024 fiscal periods are still within scope; map audit status.
- Week 2–4: Run a side-by-side Zakat computation (old rules vs. Bylaws) to quantify benefit/risk and cash-flow effect.
- Weeks 3–6: Assemble the application pack: ownership chart, trial balances, Zakat reconciliations, workings, board resolution authorizing the request, and contact of authorized signatory.
- Before 31 Aug 2025: Submit the application on the ZATCA portal; diarize for acknowledgment and follow-ups. :contentReference[oaicite:10]{index=10}
Filing Checklist (What ZATCA Expects to See)
- Entity legal details; commercial registration; ZATCA account number.
- Ownership/nationality breakdown (for mixed Zakat/CIT groups).
- Financial statements for each impacted year + detailed Zakat base workings under the Bylaws.
- Disclosure of material differences vs. prior computations and reasons for early adoption.
- Evidence of any audit communications received for the relevant years. :contentReference[oaicite:11]{index=11}
Top Optimization Ideas (Legit & Audit-Ready)
- Group structure sanity check: Re-validate treatment of intercompany balances, advances and investments under the Bylaws; update eliminations and disclosures.
- Equity & reserves mapping: Trace opening balances to source ledgers; reconcile retained earnings, reserves and dividend movements to avoid double counting. :contentReference[oaicite:12]{index=12}
- Capital-intensive sectors: Reassess asset and debt classification that impacts Zakat base under the new definitions.
- Parallel CIT/Zakat planning: If you’re a mixed-ownership entity, ensure Zakat adjustments don’t inadvertently increase the CIT side and vice-versa.
Common Pitfalls (And How to Avoid Them)
- Missing the deadline: Submitting after 31 Aug 2025 forfeits the option—build internal cut-offs two weeks earlier. :contentReference[oaicite:13]{index=13}
- Thin documentation: Unsupported reclassifications are high-risk during review—attach workings, board minutes and policies.
- Ignoring audit status: If your year is already under audit, follow the specific window referenced in your notice to avoid procedural rejection. :contentReference[oaicite:14]{index=14}
FAQ — Quick Answers
Q: Does MR No. 1463 change how Zakat is computed?
A: No—it extends the time to request applying the Bylaws to older years; the computational rules themselves sit in the Bylaws. :contentReference[oaicite:15]{index=15}
Q: Which earlier years can I apply to?
A: Fiscal years that began before 1 January 2024, subject to your audit status. :contentReference[oaicite:16]{index=16}
Q: Any related relief I should know about?
A: Separate from MR 1463, ZATCA’s penalty relief initiative (VAT & e-invoicing) currently runs until 31 December 2025; align your rectifications to benefit. :contentReference[oaicite:17]{index=17}
How to Communicate With Stakeholders
- CFO & Audit Committee: Present a quantified benefit case, scenario analysis, and audit-readiness plan.
- External auditors: Agree on evidence packs and disclosures ahead of filing.
- Group tax team: Synchronize with CIT, WHT and VAT initiatives to avoid cross-stream conflicts.
