Department of Zakat and Income Tax ( DZIT )

Introduction:

The Income Tax Law was instituted by the Royal Decree No.3321, dated 21/01/1370H. Article (19) of the Law delegated authority to the Minister of Finance to take all necessary actions to put the Income Tax Law into effect and collect the stipulated taxes.
Based on the Royal Decree, the Ministerial Resolution No.394 was issued on 07/08/1370H., establishing the Department of Zakat and Income Tax (DZIT) and having it to report directly to the Minister of Finance.
Royal Decree No.17/2/28/8634, dated 29/06/1370H., was also issued, stipulating the collection of "Zakat" from individuals and companies holding Saudi citizenship at a rate of 2.5 percent, in accordance with Islamic Jurisprudence. Based on this Decree, the Ministerial Resolution No.393, dated 06/08/1370H., was issued, which included instructions for organizing, auditing, and collecting "Zakat" from all Saudis Islamically obligated to pay it, and later on, from all citizens of member States of the Gulf Cooperation Council (GCC).

Objectives

DZIT's objectives, as set by pertinent Royal Decrees and Ministerial Resolutions issued in this respect, are confined to the auditing of Zakat and to its collection from individuals holding Saudi citizenship and from obligated citizens of member states of GCC, and to the auditing and collection of tax from foreigners, who are doing business inside the Kingdom and realizing profits from such business. Taxes are levied according to trenches specified by law.

Duties:

The DZIT undertakes many duties vested therein, including the following:

1. Examine, assess and collect "Zakat" from Saudis and from those having similar status of GCC citizens in accordance with Islamic Jurisprudence.
2. Examine, assess and collect taxes from foreign individuals and companies according to the trenches specified by the law.
3. Follow-up on taxpayers, and take necessary action to ensure payment of "Zakat", income tax and legal fines.
4. Promote voluntary compliance with Zakat and the income tax by all taxpayers.
5. Modernize and standardize work procedures by conducting research of all problems coming up from the field pertaining to Zakat and income tax collection, and by finding suitable solutions to these problems, taking into consideration Islamic rules for "Zakat" and legal principles and regulations for the income tax.