As the modern business landscape continues to evolve, questions about corporate responsibility have taken on new dimensions. One such question concerns zakat, the obligatory almsgiving in Islam: Are companies required to pay zakat, just like individuals?
To answer this, it is essential to distinguish between nonprofit institutions and profit-driven enterprises. At the same time, one must also consider how Islamic law interprets ownership and wealth within collective entities.
In principle, organizations function as social structures that bring individuals together to achieve shared goals. Some operate as nonprofits, such as charitable foundations and religious institutions. Others, however, exist to generate profit, including corporations, manufacturing firms, and limited liability companies.
Within Islamic jurisprudence, zakat applies to wealth that meets specific criteria, namely nisab (minimum threshold) and haul (one lunar year of ownership). The Qur’an explicitly commands believers:
خُذْ مِنْ أَمْوَالِهِمْ صَدَقَةً تُطَهِّرُهُمْ وَتُزَكِّيهِمْ بِهَا وَصَلِّ عَلَيْهِمْ إِنَّ صَلَاتَكَ سَكَنٌ لَهُمْ وَاللهُ سَمِيعٌ عَلِيمٌ
“Take from their wealth a charity by which you purify them and cause them increase, and invoke Allah’s blessings upon them. Indeed, your invocations are reassurance for them. And Allah is Hearing and Knowing.” (Q.S. at-Taubah [9]: 103)
Furthermore, zakat distribution is clearly defined:
إِنَّمَا الصَّدَقَاتُ لِلْفُقَرَاءِ وَالْمَسَاكِينِ وَالْعَامِلِينَ عَلَيْهَا وَالْمُؤَلَّفَةِ قُلُوبُهُمْ وَفِي الرِّقَابِ وَالْغَارِمِينَ وَفِي سَبِيلِ اللهِ وَابْنِ السَّبِيلِ فَرِيضَةً مِنَ اللهِ وَاللهُ عَلِيمٌ حَكِيمٌ
“Zakat expenditures are only for the poor and for the needy and for those employed to collect [zakat] and for bringing hearts together [for Islam] and for freeing captives or slaves and for those in debt and for the cause of Allah and for the stranded traveler—an obligation [imposed] by Allah. And Allah is Knowing and Wise.” (Q.S. at-Taubah [9]: 60)
These principles establish that zakat targets wealth that grows and belongs to those with sufficient means. Therefore, the key question becomes whether corporate assets fall into this category.
In addition, the Prophet Muhammad (PBUH) said in a hadith:
عَنِ ابْنِ عَبَّاسٍ رَضِيَ اللهُ عَنْهُمَا: أَنَّ النَّبِيَّ صَلَّى اللهُ عَلَيْهِ وَسَلَّمَ بَعَثَ مُعَاذًا رَضِيَ اللهُ عَنْهُ إِلَى اليَمَنِ، فَقَالَ: ادْعُهُمْ إِلَى شَهَادَةِ أَنْ لاَ إِلَهَ إِلَّا اللهُ، وَأَنِّي رَسُولُ اللهِ، فَإِنْ هُمْ أَطَاعُوا لِذَلِكَ، فَأَعْلِمْهُمْ أَنَّ اللهَ قَدِ افْتَرَضَ عَلَيْهِمْ صَدَقَةً فِي أَمْوَالِهِمْ تُؤْخَذُ مِنْ أَغْنِيَائِهِمْ وَتُرَدُّ عَلَى فُقَرَائِهِمْ
“Allah has made charity (zakat) obligatory upon their wealth, to be taken from their rich and given to their poor.” (Narrated by al-Bukhari, no. 1395)
These sources indicate that zakat is oriented toward wealth that grows and is owned by those who possess sufficient means. In this context, companies—being entities that own assets and generate profit—fall into a relevant category for zakat obligation.
Corporate Wealth and Zakat Liability
From an economic standpoint, companies possess characteristics similar to individuals. They hold assets, engage in productive activities, and continuously generate profit. Therefore, many contemporary scholars maintain that corporations meet the criteria for zakat liability.
This position is further reinforced by national regulation in Indonesia. Law No. 23 of 2011 states that zakat on wealth (zakat mal) includes assets owned by both individuals and business entities. Moreover, the National Zakat Agency (BAZNAS) affirms that wealth invested in profit-generating activities constitutes zakatable assets, generally at a rate of 2.5 percent after deducting non-zakatable components.
More explicitly, the decision of the 25th National Tarjih Council of Muhammadiyah states that institutions possessing wealth and conducting profit-generating activities are obligated to pay zakat once they meet the requirements of nisab and haul.
However, it is crucial to distinguish this from nonprofit institutions. Organizations such as Muhammadiyah and its charitable enterprises fundamentally aim at social and humanitarian objectives. The wealth they manage is not intended for personal accumulation but for public benefit. Therefore, in principle, such institutions are not subject to zakat obligations.
Thus, it can be concluded that companies, as profit-oriented entities, are indeed obligated to pay zakat, provided that their wealth meets the criteria of nisab and haul. Meanwhile, nonprofit institutions are generally exempt, except for their commercial ventures.
Reference:
Council for Religious Opinion and Reform of Muhammadiyah Central Board, “Zakat AUM, Perusahaan/Korporasi”, in Fatwa_09_2020_Zakat Korporasi.
