Introduction
Zakat is one of the most important elements of Saudi Arabia’s fiscal and regulatory system. It applies to Saudi and GCC-owned companies and is supervised by the Zakat, Tax and Customs Authority (ZATCA). Filing Zakat correctly is not only a religious and legal duty but also a safeguard against penalties and disputes.
At MHK Services, we help businesses in Saudi Arabia with Zakat filing by ensuring accurate calculations, timely submissions, and proper record management. Our role is to make the process simple and compliant so that businesses can focus on growth without worrying about tax issues.
Understanding Zakat Filing in Saudi Arabia
Zakat applies mainly to Saudi- and GCC-owned businesses, partnerships, and other entities specified under ZATCA regulations. Companies are required to file annual Zakat returns that declare their financial base and calculate the amount due. These filings must be accurate and supported by proper financial documentation.
The filing deadline is within 120 days from the end of the financial year, and all submissions must be made electronically through the ZATCA portal. Missing this deadline or filing with errors can result in financial penalties.
Key Updates in Zakat Filing for 2025
ZATCA has introduced new measures to improve compliance and ensure transparency. Some of the most notable updates include stricter documentation requirements, increased monitoring of group company filings, and greater emphasis on electronic submissions. Businesses are also required to keep complete records for a period of up to 10 years, making documentation management a central part of compliance.
How Zakat is Calculated
The Zakat base is calculated using the financial statements of the company. It generally takes into account equity, reserves, retained earnings, and working capital. Non-deductible expenses are added back to ensure the calculation is in line with ZATCA’s rules, while fixed assets and certain long-term liabilities are excluded.
For companies with mixed ownership, Zakat applies to the portion owned by Saudi or GCC nationals, while the foreign ownership portion is subject to income tax. This requires careful segregation of financial information to avoid errors.
Common Challenges Businesses Face
Many businesses in Saudi Arabia find Zakat filing difficult because of changing rules and complex calculations. Challenges often arise when consolidating group company accounts, separating Zakat and tax obligations in mixed ownership, or preparing supporting schedules in the format required by ZATCA. Another common issue is missing filing deadlines, which can lead to fines and interest charges.
Zakat Audits and Assessments
ZATCA frequently reviews Zakat filings and may request additional evidence. In some cases, full audits are carried out to confirm the accuracy of reported figures. Companies must therefore maintain complete records, including financial statements, schedules, and supporting evidence for all adjustments made in the Zakat base. Failure to provide this information may lead to reassessments or penalties.
How MHK Services Supports Zakat Filing
At MHK Services, we assist clients with every stage of the Zakat process. Our support includes registering with ZATCA, preparing calculations in line with the regulations, and reviewing financial records for accuracy. We also handle the preparation and electronic submission of returns to ensure deadlines are met.
For businesses facing audits or assessments, we help organize documents and respond effectively to ZATCA’s queries. For companies with mixed ownership, we provide guidance on separating Zakat and income tax obligations to ensure proper compliance.
Why Choose MHK Services
Choosing MHK Services means working with a partner that understands both the regulatory requirements and the practical challenges businesses face. We focus on accuracy, timeliness, and clear communication with our clients. By managing the details of Zakat compliance, we give businesses the confidence that their filings are complete, compliant, and ready for any review.
Conclusion
Zakat filing is a crucial responsibility for businesses in Saudi Arabia. With recent updates from ZATCA, the process demands greater accuracy and stronger record-keeping than ever before. Companies that fail to comply risk penalties, reassessments, and unnecessary financial exposure.
MHK Services provides the professional support businesses need to meet their Zakat obligations without difficulty. From registration and calculation to filing and audit preparation, we ensure compliance at every step, giving businesses peace of mind and allowing them to focus on growth.