Zakat base ceiling and floor
Our computed base looks too high. Is there a limit?
The situation
Articles 27 and 28 set a floor and a ceiling. The ceiling is equity at year end plus the gap between adjusted and book profit.
The law
- Zakat Implementing Regulation Articles 27 and 28: Floor and ceiling on the Zakat base linked to adjusted net profit and equity
What it means for you
If your base exceeds the ceiling, cap it. If it falls below adjusted net profit, the floor test applies. Example: equity SAR 3,000,000 with profit gap SAR 100,000 gives a ceiling of SAR 3,100,000.
What to do
- Compute ceiling.
- Compute floor.
- Apply limits.
We can do this for youAnnual Zakat return and Zakat certificate for Saudi and GCC-owned companies: SAR 6,500