Tax year
In one sentenceThe period for which the business's income subject to income tax or its Zakat base is calculated and a single annual return is filed; it usually matches the fiscal year.
Simply put
As a rule the tax year is the fiscal year itself, Gregorian or Hijri, and it is changed only with ZATCA's approval.
The type of year affects Zakat: 2.5% for a Hijri year and 2.57768% for a Gregorian year.
Example
A company's fiscal year ends on 31 December: its tax year is Gregorian, so it calculates Zakat on the shares of the partners subject to Zakat at 2.57768%.
Don't confuse it with
Tax periodThe tax period is a month or quarter for VAT returns, and the tax year is a full year for Zakat and income tax.