Zakat on Business Entities and their Tax Treatment
Muhammad Ali Nuruddin,Tika Widiastuti

Department of Islamic Economics
Faculty of Economics and Business
Airlangga University
Surabaya

Abstract

The focus of this paper^s discussion is on zakat on business entities and their tax treatment, whether the zakat clause as a deduction from taxable income is regulated in Law No. 23 of 2011 concerning zakat management and Law Number 36 of 2008 concerning fourth Amendment to Law Number 7 of 1983 concerning Income Tax. This research uses a case study research approach where the business entities that are sampled are companies engaged in property services whose income tax calculations are final and companies in the trading sector whose tax calculations use Article 17 of the Income Tax Law. The results of this study will show whether corporate zakat paid by business entities will be able to reduce the tax payable.

Keywords: business entity zakat, taxable income, final income tax, tax payable

Topic: Islamic accounting, auditing, and performance changes