Zakat on legal entities (Shakhsiyyah I’tibariyyah): a shari’ah analysis

Hasan, Aznan (2018) Zakat on legal entities (Shakhsiyyah I’tibariyyah): a shari’ah analysis. Al-Shajarah, Special Issue: Islamic Banking and Finance 2018. pp. 255-282. ISSN 1394-6870

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Abstract

The purpose of this study is to explore the issues related to zakat implementation on shakhsiyyah i'tibariyyah (legal entities) to establish whether they are subject to zakat and the methodology for zakat payment. The study examines the issues from the Shari’ah perspective and concludes on several issues based on ijtihad (independent reasoning) relying majorly on the sources of the Shari’ah, opinions of classical and contemporary scholars and the resolutions of the fiqh academies. Primarily, the Shari’ah recognises the concept of shakhsiyyah i’tibariyyah. Although the imposition of zakat is still largely vested on the shareholders of the company, the company may still pay zakat at the company’s level provided that the company is authorized to do so (by way of its Articles of Association or decision made by the general assembly) or because the law dictates so. This shows that the imposition of zakat is still vested with the individuals, even though it can be paid at the company’s level. It also proposes that, if the payment of zakat is to be made at the company’s level, it also includes all shareholders including ownership of non-Muslims, government-owned shares and shares owned by waqf ahli. Nevertheless, the portion of payment to be paid by the governments, non- Muslims, etc, are in actual fact not zakat. However, for the purpose of consistency, there is no harm to name and itemising this payment in the financial report of the company as payment of zakat. The study also stresses on the need to facilitate for a proper methodology for zakat payment and to offer proper incentive for the payment of zakat in the manner that will be beneficial to companies which pay zakat, the enforcement agencies and the recipients

Item Type:	Article (Journal)
Additional Information:	2241/89343
Uncontrolled Keywords:	Zakat, shakhsiyya i’tibariyya, legal entities
Subjects:	BPH Islamic Economics
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Institute of Islamic Banking & Finance (IIiBF)
Depositing User:	Dr Aznan Hasan
Date Deposited:	16 Apr 2021 10:34
Last Modified:	16 Apr 2021 10:34
URI:	http://irep.iium.edu.my/id/eprint/89343

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