The state bears the zakat and income tax resulting from the investment in the sukuk and bonds issued by the Ministry of Finance locally in Saudi Riyals until their maturity date.

The state's liability referred to in "First" above shall be in accordance with the following controls:

1. The holder of the sukuk or bonds shall submit their declaration within the statutory period in accordance with the procedures of the General Panel for Zakat and Income, and shall pay the amount due to the panel accordingly.

2. The holder of the sukuk or bonds must be subject to taxation according to their financial statements in accordance with the panel's procedures.

3. The holder of the sukuk and bonds must not be among the entities exempt from zakat or income tax.

4. The state shall not bear an amount greater than what the taxpayer has paid to the panel.

: CALCULATION OF THE AMOUNT THE STATE ASSUMES IN RESPECT OF ZAKAT ON BONDS AND SECURITIES SHALL BE DETERMINED BY CALCULATING TWO ZAKAT BASES FOR THE ZAKAT PAYER, FROM ONE OF WHICH THE BONDS OR SECURITIES SHALL BE DEDUCTED -BUT NOT FROM THE OTHER ZAKAT BASE-, THEN MULTIPLYING THE DIFFERENCE BETWEEN THE TWO TAX BASES BY THE ZAKAT RATE AS PER THE EXECUTIVE REGULATIONS FOR THE COLLECTION OF ZAKAT, THE SUM OF WHICH IS THE AMOUNT ASSUMED BY THE STATE WITH THE FOLLOWING EXCEPTIONS:

• 1. If the [zakat] base meets the minimum zakat base whether the investment in government bonds or securities is deducted or not, then the amount of zakat that the State will assume is the zakat due on annual returns from the bonds or securities, calculated using the following formula:

• (adjusted net profit / gross profit) x [annual] returns on bonds and securities x zakat rate

• 1. If upon deducting the investment in government bonds or securities from the zakat base the [zakat] base meets the minimum zakat base but does not meet it without the deduction, then the amount of zakat that the State will assume is the difference between the two zakat bases less the portion of [annual] returns on [government] bonds and securities from the net profit multiplied by the zakat rate, calculated using the following formula:

• [the difference between the two zakat bases – ((adjusted net profit / gross profit) x [annual] returns on bonds and securities)] x zakat rate.

The taxpayer is considered an investor in investment funds that invest in sukuk and government bonds covered by this decision, and is treated as a holder of sukuk and bonds. The amount of liability is calculated in accordance with what is stated in item (Third) of this decision, based on the zakat base and the adjusted profit of the fund multiplied by the taxpayer's ownership percentage in the fund's assets. The maximum limit for the state's liability for the zakat of the investor in the fund is according to the following equation:

Investments of the fund in sukuk or government bonds for which the state bears the zakat × taxpayer's ownership percentage in the fund's assets at the time of zakat calculation × zakat percentage for the fund.

THE INCOME TAX AMOUNT ASSUMED BY THE STATE SHALL BE THE TAX DUE ON NET RETURNS ON [GOVERNMENT] BONDS AND SECURITIES CALCULATED USING THE FOLLOWING FORMULA:

• (adjusted net profit/gross profit) x [annual] returns on bonds and securities x tax rate May God bless this endeavor.

This burden applies to the financial years that begin on or after the date of 1/1/2019, and the burden ceases for any instrument of government debt except for the sukuk issued under the sukuk issuance program in Saudi Riyals at the Ministry of Finance starting from 1/1/2020.