Corporate Zakat Service
Professional zakat calculation for your company. We review your financial statements. Calculate zakat on cash, inventory, and receivables. Deduct liabilities.
Professional Zakat Calculation for Your Company
If you own a business, you have a zakat obligation separate from your personal zakat. Business zakat applies to the assets of the business itself. This includes cash in the company bank accounts. It includes inventory that you hold for trading. It includes accounts receivable from customers who owe you money. It also includes any gold or silver the business owns. You deduct the business liabilities including accounts payable, short term loans, and other debts due within one year. On the remaining net zakatable assets, you pay 2.5 percent.
Calculating business zakat is complex. You need to know which assets are zakatable and which are not. Fixed assets like property, equipment, and vehicles used in the business are generally not zakatable according to most scholars. But if you hold them for sale, they are zakatable as inventory. The distinction matters.
Our Corporate Zakat service provides a professional calculation for your company. We review your financial statements. We identify all zakatable assets. We deduct all allowable liabilities. We apply the correct nisab threshold. We calculate your exact zakat amount. We provide a detailed report suitable for your records and for your zakat payment. We also provide an official zakat certificate that you can share with your shareholders and your community.
Do not guess your corporate zakat. Get a professional calculation from experts who understand both accounting and Islamic law.
What's Included
Financial Statement Review
We review your company financial statements including the balance sheet and profit and loss statement. We identify all assets and liabilities. We distinguish between zakatable assets and non zakatable assets. Cash in bank accounts is zakatable. Inventory held for trading is zakatable. Accounts receivable due within one year is zakatable. Fixed assets like property and equipment are generally not zakatable unless held for sale. We explain each classification so you understand the calculation.
Zakatable Asset Calculation
We calculate the total value of your zakatable assets. For cash we take the balance in all bank accounts on your zakat due date. For inventory we value at cost not selling price. For accounts receivable we include all amounts due within one year regardless of whether they have been collected yet. For gold and silver we use market value on the due date. We also identify any other zakatable assets specific to your business such as agricultural produce or livestock.
Liability Deduction
We deduct your business liabilities from your zakatable assets. Allowed liabilities include accounts payable to suppliers, short term loans due within one year, accrued expenses, and any other debts that are due and payable. Long term liabilities like mortgages on business property are generally not deductible. The net amount after deducting liabilities is what you pay zakat on. We clearly show all deductions in your report.
Nisab Verification
We check whether your net zakatable assets exceed the nisab threshold. Nisab is the minimum amount that makes zakat obligatory. For business zakat, most scholars use the higher of the gold nisab or silver nisab. We calculate both and apply your preferred benchmark. If your net assets are below nisab, no zakat is due that year. We notify you and remind you to check again next year. If your net assets are above nisab, we calculate your zakat amount.
Detailed Zakat Report
You receive a comprehensive zakat report suitable for your business records. The report includes a summary of your zakatable assets, a summary of your deductible liabilities, the net zakatable amount, the nisab check, the zakat calculation, and the final amount due. The report is typically 10 to 15 pages long. It includes explanations of each calculation so your accountant can verify the numbers. It also includes recommendations for future years.
Corporate Zakat Certificate
You receive an official corporate zakat certificate. The certificate includes your company name, the zakat year, the total zakat amount, and the date of calculation. It is signed by our Shariah scholars. You can share this certificate with your shareholders, your board of directors, and your community. It provides assurance that your company has fulfilled its zakat obligation correctly.
How It Works
Submit Financial Statements
Provide your company financial statements for the period ending on your zakat due date. We accept financial statements prepared by your accountant or accounting software. If you do not have formal financial statements, we provide a worksheet for you to complete.
Review by Our Team
Our team reviews your financial statements within five to seven business days. We identify zakatable assets and deductible liabilities. We note any unusual items that need clarification. We contact you if we have questions.
Draft Calculation
We prepare a draft zakat calculation. We show you the numbers. We explain each step. We ask for your confirmation that our understanding of your business is correct.
Final Calculation
Once you confirm the draft, we finalize the calculation. We prepare the detailed report and the zakat certificate. We deliver both documents electronically within 24 hours.
Payment Guidance
We provide guidance on how to pay your corporate zakat. We recommend zakat eligible charities or organizations. We also provide documentation for your tax records if zakat is tax deductible in your jurisdiction.
Annual Reminder
We remind you when your next zakat due date is approaching. We also notify you if the nisab threshold changes significantly. You never miss your obligation.
Frequently Asked Questions
Corporate zakat applies to several categories of assets. Cash in bank accounts and cash on hand is zakatable. You pay 2.5 percent of the cash balance on your zakat due date. Inventory that you hold for trading is zakatable at cost value. You do not pay zakat on selling price because the profit has not been realized yet. Accounts receivable from customers who owe you money are zakatable if the payment is due within one year. Even if a customer is late paying, the receivable is still an asset you own. Gold and silver held by the business are zakatable at market value. Investments in stocks of other companies are zakatable if those companies are halal to invest in. Fixed assets like property, equipment, vehicles, and furniture used in the business are generally not zakatable according to most scholars. They are tools of production, not trading goods. However some scholars say that equipment held for sale is zakatable. We follow your school of thought on this matter.
Inventory for corporate zakat is valued at cost not selling price. This is the consensus of most scholars. The reason is that the profit on the inventory has not yet been earned. You cannot pay zakat on profit you have not made. So we look at your inventory records and take the cost value of each item. If you use different costing methods like FIFO or weighted average, we follow your accounting method. If your inventory has become obsolete or damaged, we reduce its value to net realizable value if that is lower than cost. We do not include work in progress inventory as a separate category unless you are a manufacturer. For manufacturers we treat raw materials, work in progress, and finished goods all as inventory valued at cost.
Yes the business debts are deducted from zakatable assets. Allowed deductions include accounts payable to suppliers for goods or services received, short term loans or borrowings due within one year, accrued expenses like salaries or utilities that are owed but not yet paid, and any other debts that are due and payable. Long term liabilities like a mortgage on a business property that is due in more than one year are generally not deductible. The net amount after deducting debts is what you pay zakat on. So if your zakatable assets are HKD 1,000,000 and your deductible debts are HKD 300,000, you pay zakat on HKD 700,000. The zakat amount would be HKD 17,500. This is fair because you only pay zakat on what you truly own after obligations.
If your business has multiple owners, the corporate zakat calculation is done at the business level. The business pays zakat from its own assets. The payment reduces the business net worth. Each owner share of the business is affected proportionally. Alternatively, you can calculate each owner individual zakat including their share of the business assets. This is more complex but may be preferred if owners have different personal zakat due dates. We can help you with either approach. Our report can show both the corporate level calculation and the allocation to each owner. You and your partners can decide which approach to follow. We recommend consulting your tax advisor as well because the two approaches may have different tax implications.
Corporate zakat is due once per lunar year. You choose a zakat due date for your business. Many businesses use the end of their financial year for convenience. Others use Ramadan because rewards are multiplied. You must use the same due date each year unless you have a valid reason to change. Your business zakat calculation must be based on the financial position at that date. If your financial year does not align with your zakat due date, you may need to prepare interim financial statements for the calculation. We can help you determine the best due date for your business. We also remind you annually so you never miss it.
Our corporate zakat calculation fee depends on the complexity of your business. For a small business with simple assets like cash and inventory only, the fee is typically HKD 800 to HKD 1,500. For a medium business with multiple asset categories and moderate complexity, the fee is HKD 1,500 to HKD 3,000. For a large business with complex assets like investments, foreign currency accounts, and extensive inventory, the fee is HKD 3,000 to HKD 6,000. These fees include the financial statement review, the zakat calculation, the detailed report, the zakat certificate, and the annual reminder service. We provide a fixed price quote before you engage us based on the information you provide about your business.