Zakat is one of the five pillars of Islam and has an important role in wealth distribution and poverty alleviation. At the Ijtima of the VII MUI Fatwa Commission in 2021, one of the main discussions was about the obligation of zakat on corporate wealth. This article will review the concept of corporate zakat according to the results of the Ijtima, provide examples of a balance sheet and income statement, and analyse it based on Islamic principles.
Corporate Zakat: An Overview
The main question discussed in the Ijtima was whether companies are obliged to pay zakat. Two main views emerged:
- The Non-Liability Argument: This view states that companies are not mukallaf (legally responsible individuals) and therefore are not obliged to pay zakat. Zakat is traditionally obligatory on individuals who reach the nisab (minimum threshold) and have wealth for one year (haul).
- Liability Argument: The second perspective, which is in line with MUI’s stance, states that corporate assets should be subject to zakat as they represent accumulated wealth. Based on the Qur’anic verse, “Take zakat from some of their wealth, with which you cleanse and purify them” (QS. At-Taubah: 103). Therefore, companies, as legal entities, are obliged to pay zakat if they fulfil the nisab and haul requirements.
The Ijtima ruled that companies must pay zakat, either directly or on behalf of their shareholders, if they have assets that are subject to zakat, such as current assets, investments, and physical property used to generate income.
Also Read: Implementation of The Zakat System in The Modern Era
Calculations and criteria
Zakat on company wealth is calculated based on EBITDA (earnings before interest, taxes, depreciation, and amortisation) after deducting operating expenses. The criteria that must be met include:
Haul (Duration): The asset must be owned for one lunar year.
Nisab (Threshold): The value of the asset must reach or exceed the nisab, which is equivalent to 85 grammes of gold. (Currently around IDR 102,000,000, based on the price of 1 gramme of gold at around IDR 1,200,000.).
Rate: The general zakat rate is 2.5% of the wealth that falls under the zakat jurisdiction.
Example of a Balance Sheet and Income Statement
Example Balance Sheet:
| Assets | Amount (IDR) |
|---|---|
| Current Assets | 200,000,000 |
| Fixed Assets | 500,000,000 |
| Investments | 300,000,000 |
| Total Assets | 1,000,000,000 |
| Liabilities and Equity | |
| Liabilities | 300,000,000 |
| Equity | 700,000,000 |
| Total Liabilities & Equity | 1,000,000,000 |
Example Income Statement:
| Description | Amount (IDR) |
|---|---|
| Revenue | 500,000,000 |
| Operating Expenses | 300,000,000 |
| EBITDA | 200,000,000 |
Zakat Calculation
- Determine Zakatable Assets: EBITDA = Revenue – Operating Expenses = 500,000,000 – 300,000,000 = 200,000,000 IDR
- Check Nisab: Nisab is equivalent to 85 grammes of gold (approximately 81,600,000 IDR).
- Calculate Zakat: If EBITDA exceeds nisab, Zakat = 2.5% of 200,000,000 = 5,000,000 IDR.
Zakat Regulation in the Ijtima
1. Corporate wealth that meets zakat conditions is obligated to be zakat.
2. The corporate wealth referred to in point 1 includes, among others: a. Current assets of the company; b. Company funds invested in other companies and c. Physical assets managed for rental or other business purposes.
3. Corporate wealth is subject to zakat under the following conditions: a. It has been held for one lunar year (hawalan al-haul); b. It meets the nisab threshold; c. The zakat rate is determined according to the business sector.
4.T he nisab and zakat rate for corporate wealth refer to several types of zakat on wealth (zakah al-mal): gold and silver (naqdain), trade goods (‘urudh al-tijarah), agricultural produce (al-zuru’ wa al-tsimar), livestock (al-masyiyah), and mining products (ma’dan).
5. The calculation of corporate zakat is based on net profit after deducting operational costs, before tax payments and deductions for profit distribution (dividends) for future investments and various other needs.
The 2021 MUI Fatwa Commission Ijtima affirmed the obligation of zakat on corporate wealth, in accordance with contemporary economic realities and Islamic principles. Companies, like individuals, have wealth that must be cleansed through zakat, ensuring a fair distribution of resources within society. This progressive approach not only supports religious observance but also promotes social justice and economic balance.
Also Read: The Eight Categories of Asnaf: Who Qualifies for Zakat Distribution?
Wallahu a’lam
References
Majelis Ulama Indonesia. (2021). Hasil Ijtima Komisi Fatwa MUI 2021.