2. Zakat Regulations (by-law)

Zakat By-Law was issued per Ministerial Resolution number 393, dated

6/8/1370 H (corresponding to 13/5/1950) consisting of 20 articles as

follows:

1. ALL Saudi companies and persons: male, female, adults, minors or legally

incompetent, are subject to zakat after completion of one year under the

provisions of Islamic Jurisprudence starting from 1/1/1370 H (corresponding to 13/10/1950).

2. Capital and its proceeds, receipts, profits and gains of zakatpayers are

    subject to zakat in accordance with relevant Islamic provisions

3. Capital and its proceeds, receipts, profits and gains of zakatpayers from

commerce, industrial activity, personal endeavors, financial properties and

belongings, of whatever type and form, and inclusive of financial and

commercial deals, dividends, in general any type of receipt that is zakatable

according to Islamic Jurisprudence, are subject to zakat

4. Zakat is assessed on commercial goods, properties and financial belongings

at estimated values at the end of the year in accordance with provisions of

Islamic Jurisprudence

5. Current methods based on orders and instructions to assess zakat on sheep,

   cattle and plants will continue.

6. ALL individuals and companies with industrial or commercial activity are required to keep organized books that show capital, receipts and expenditure

relevant to their activity for each year to be used to assess their zakat. The

books must be certified by commercial courts or, if not available, by notary

publics.

7. Zakatpayers with no reliable accounts will be assessed based on

determination of value of zakatable goods, equipment, tools, belongings and

properties at the end of the year; or based on estimation for zakatpayers with

   no apparent zakatable items.

8. ALL zakatpayers of individuals and companies are required to file a

   declaration with financial officers responsible for collection of zakat

showing zakatable monies, goods, properties, cash belongings, profits from such items, and zakat amount during the first month of the year following the zakat year.

9. The financial officer responsible for assessment and collection of zakat will review data filed by zakatpayers referred to above, and when necessary he may audit books, and upon completion he will inform the zakatpayer of the amount payable by him in official stamped letter.

10. A zakatpayer may object to the amount of zakat within 15 days! of the receipt date by a registered-mailed memorandum stating reasons for objection addressed to the notifying department. Otherwise, zakatpayer loses the right to object and is required to pay the amount as stated in the received notice.

11. The department receiving the objection shall refer it to the 1 st Instance Committee consisting of the Prince of the area or representative (as chairman), and as members the Judge and the senior financial officer of the area, and three representatives elected annually by the Administrative Council of the area. The 1 st Instance Committee may review zakatpayers books and records and any other material that help reach the truth and will issue its resolution within 15 days of the objection date.

12. The financial office and the zakatpayer have the right to appeal the 1st Instance Committee resolution to the Appeal Committee provided for in article 26 of resolution 340, dated 1/7/1370 H (8/4/1951) within periods as prescribed in article 10 above2. The Appeal Committee shall issue its resolution in regard to the objection within a period not to exceed one month of its receipt of the objection.

13. To appeal the 1st Instance Committee's resolution, the zakatpayer must first pay zakat in accordance with the objected resolution; or in the case of overpayment by zakatpayer, he shall receive refund. To consider the appeal, it should have attached with it an officially certified copy of the receipt of payment of the mentioned zakat.

14. The 1 st Instance Committee and the Appeal Committee have the right to call

the zakatpayer or representative to appear in front of either of them. The Zakatpayer must respond, and ifhe refrains from appearance with no valid reason, the   objection or the appeal may not be accepted.

15. The provisions of articles 21 and 31 of resolution 340, dated 1/7/1370 H.

      (8/4/1951) are applicable to zakatpayers.

16. Officials referred to in articles 18 and 19 of resolution 340, dated 1/7/1370 H. (8/4/1951) will perform duties of assessment and collection of zakat in addition to similar tax duties.

17. In the case of lack of clarity that may surface during implementation of articles of this resolution, the Minister of Finance and National Economy shall be the reference authority for clarification and interpretation.

18. The officials responsible for implementation of this resolution are required to keep the necessary books and files to assess and collect zakat, register objections and notices, and to obtain data from zakatpayers.

19.  This resolution will be printed in sufficient number, published in local

      newspapers, and circulated to all Financial Offices.

20. The Director General of Finance shall supervise printing of the required books, forms of notices and statements and shall distribute them to Financial Offices as soon as possible.