Zakah on Shares Held for Sale
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The third question of Fatwa No. ( 18494 )
Q3: The companies are registered with the state’s competent authority in the commercial registry, and their capital and the number of their shares are known and defined. They pay zakah to the state and distribute the remaining profits to the shareholders, each according to his share. Is zakah due on the owner of the shares, whether he was a shareholder from the beginning or he bought shares from the company’s shares? And does he pay zakah on the capital of the shares in his hand at the time of the lunar year, or on their market value at the time of zakah? It is known that the number of shares increases and decreases as a result of speculation, where he sells when prices rise and buys when they fall.
A3: If the company pays the full zakah on the profits, then there is no zakah due on the shareholders regarding what reaches them from it, if they have authorized the company to pay the zakah on their behalf. And if it does not pay it
in full, it is obligatory for the owners of the shares to pay what remains of it from what reaches them. They are also obligated to pay zakah on the shares if they are held for sale, because in that case they become merchandise for trade. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Q3: The companies are registered with the state’s competent authority in the commercial registry, and their capital and the number of their shares are known and defined. They pay zakah to the state and distribute the remaining profits to the shareholders, each according to his share. Is zakah due on the owner of the shares, whether he was a shareholder from the beginning or he bought shares from the company’s shares? And does he pay zakah on the capital of the shares in his hand at the time of the lunar year, or on their market value at the time of zakah? It is known that the number of shares increases and decreases as a result of speculation, where he sells when prices rise and buys when they fall.
A3: If the company pays the full zakah on the profits, then there is no zakah due on the shareholders regarding what reaches them from it, if they have authorized the company to pay the zakah on their behalf. And if it does not pay it
in full, it is obligatory for the owners of the shares to pay what remains of it from what reaches them. They are also obligated to pay zakah on the shares if they are held for sale, because in that case they become merchandise for trade. 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.