How do company partners pay zakat?

Since companies are considered legal entities, it is not the company itself but each partner’s share that is subject to zakat if, alone or together with other assets, it reaches the nisab threshold. Accordingly, a person who owns wealth exceeding their essential needs and amounting to the nisab (80.18 grams of gold or its value) must pay zakat on it after one lunar year has passed.

For companies operating in the industrial sector, fixed assets (such as production tools, machinery, etc.) are exempt from zakat. After deducting the costs of annual debts, materials, labor, production, marketing, management, financing, and similar expenses, the current assets (semi-finished and finished goods, raw materials, cash, checks, etc.), together with net profit, are subject to zakat at the rate of one-fortieth (2.5%). (Zühaylî, el-Fıkhuî-İslâmî, 3/1947-1948) Therefore, if a partner in such a company has a share of the current assets (excluding the company’s office, equipment, and other fixed assets) that reaches the nisab and a year has passed over it, they must pay zakat on it. The same applies to companies operating in the field of trade.

If shareholders leave the payment of zakat to the company management, the management may pay zakat on behalf of the shareholders. In this case, the company management calculates and pays zakat in the same manner as individuals do for their own wealth. If the company has not paid zakat on the shares, then the shareholders themselves must pay zakat on their own shares.

An inventory/balance sheet is prepared annually based on the lunar year. Current assets, cash, checks, and receivables are totaled in value. After deducting any debts, 2.5% of the remaining total is given as zakat.

Source: T.C. Diyanet İşleri Başkanlığı, Din İşleri Yüksek Kurulu