SZTAC 131/2021/IR;1644/2018/ZW
The error in the accounting orientation does entail imposing Zakat on funds not in the hands of the taxpayer.
The depreciation in the value of assets shall be recorded in the income statement as an expense and at the same time it shall reduce the amount of assets deducted from the base, making its impact on the Zakat Base zero.
Background
On Tuesday 19/11/1442 AH corresponding to 29/06/2021 AD, First Appeals Chamber for Income Tax Interventions and Disputes formed in accordance with the Saudi Arabia Royal Order No. 65474/1439 dated 23/12/1439 AH, held its session in its headquarter in the city of Riyadh, to consider the appeal submitted on 23/03/1438, by the /…. Company on the decision of the First Instance Committee for Tax Zakat Objection Riyadh, No. (1) for the year 1438 AH issued regarding the objection no. (25/37) regarding the Zakat Tax Assessment for the years 2010 AD till 2012 AD, filed by the appellant against the General Authority For Zakat, Tax and customs, on which the preliminary decision concluded the following:
The objection of …. Taxpayer Company on the Zakat Tax Assessment of the years 2010 till 2012 AD was accepted in form.