Zakah on the company's capital and on total profits after the completion of the lunar year
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Fatwa No. ( 15762 )
Q: A joint-stock company was formed to sell cars on installment after purchasing and owning them. The nominal value of the share is ( 40.000 ) forty thousand riyals; twenty thousand paid in advance, and twenty thousand in monthly installments, each installment being one thousand riyals. The company's activity began in Shawwal 1412 AH, with an amount of ( 940.000 ) to purchase cars and sell them on deferred payment in monthly installments, reaching up to 36 months. The balance sheet in Dhul-Qa'dah 1413 AH was as follows:
Paid-up capital: 1.551.000 one million five hundred and fifty-one thousand riyals. Purchases during the year: 2.308.050 two million three hundred and eight thousand and fifty riyals. Sales during the year: 2.861.508 two million eight hundred and sixty-one thousand five hundred and eight riyals. Total profit from operations: 553.458 five hundred and fifty-three thousand four hundred and fifty-eight riyals. Total expenses: 29.477 twenty-nine thousand four hundred and seventy-seven riyals. Here we ask about the provision for the Shari'ah zakah: Is it from the net profit after deducting expenses, or from the total profit, or from the capital, or from the sales? Knowing that the profits are not currently present, as the purchase and sale took place at the end of each month, and they were sold to new buyers after paying the installments from the other creditors. We also hope to be guided on the method of calculating the Shari'ah zakah in such a company. And may Allah's peace be upon you, returning as it began.
A: If the matter is as mentioned, zakah is obligatory on the company's capital, and on the total profits after the completion of the lunar year, even if the profits are a debt in the hands of others. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Q: A joint-stock company was formed to sell cars on installment after purchasing and owning them. The nominal value of the share is ( 40.000 ) forty thousand riyals; twenty thousand paid in advance, and twenty thousand in monthly installments, each installment being one thousand riyals. The company's activity began in Shawwal 1412 AH, with an amount of ( 940.000 ) to purchase cars and sell them on deferred payment in monthly installments, reaching up to 36 months. The balance sheet in Dhul-Qa'dah 1413 AH was as follows:
Paid-up capital: 1.551.000 one million five hundred and fifty-one thousand riyals. Purchases during the year: 2.308.050 two million three hundred and eight thousand and fifty riyals. Sales during the year: 2.861.508 two million eight hundred and sixty-one thousand five hundred and eight riyals. Total profit from operations: 553.458 five hundred and fifty-three thousand four hundred and fifty-eight riyals. Total expenses: 29.477 twenty-nine thousand four hundred and seventy-seven riyals. Here we ask about the provision for the Shari'ah zakah: Is it from the net profit after deducting expenses, or from the total profit, or from the capital, or from the sales? Knowing that the profits are not currently present, as the purchase and sale took place at the end of each month, and they were sold to new buyers after paying the installments from the other creditors. We also hope to be guided on the method of calculating the Shari'ah zakah in such a company. And may Allah's peace be upon you, returning as it began.
A: If the matter is as mentioned, zakah is obligatory on the company's capital, and on the total profits after the completion of the lunar year, even if the profits are a debt in the hands of others. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.