How to Pay Zakah on Trade Goods
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Q2: A business man who has a medium-sized company asks about how to pay zakah, meaning, does he have to appraise everything he owns (capital + trade goods) or does he only pay zakah on the profits, especially for commercial and industrial companies? Please inform us about this issue. May Allah reward you with good.
A2: The company's assets are not free from four things: 1- Trade goods: their value is estimated at the time zakah becomes obligatory, which is the completion of the lunar year, whether the estimated value equals their value at the time of purchase, or is more or less than it, and their zakah is paid. 2- Factory equipment: such as machines, cars, and the like, used for their purposes; there is no zakah on these because they are prepared for use, not for sale. 3- The money the company obtains from its production: this is subject to zakah when the lunar year has passed over it and each person's share reaches the nisab. 4- Shares in the company's capital: if these are for exploitation, zakah is due on their yield when it reaches the nisab at the time of receipt; if the shares are offered for sale and trading, zakah is obligatory on the shares, with their value estimated at the completion of the lunar year. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
A2: The company's assets are not free from four things: 1- Trade goods: their value is estimated at the time zakah becomes obligatory, which is the completion of the lunar year, whether the estimated value equals their value at the time of purchase, or is more or less than it, and their zakah is paid. 2- Factory equipment: such as machines, cars, and the like, used for their purposes; there is no zakah on these because they are prepared for use, not for sale. 3- The money the company obtains from its production: this is subject to zakah when the lunar year has passed over it and each person's share reaches the nisab. 4- Shares in the company's capital: if these are for exploitation, zakah is due on their yield when it reaches the nisab at the time of receipt; if the shares are offered for sale and trading, zakah is obligatory on the shares, with their value estimated at the completion of the lunar year. 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.