Guidelines

Zakat on trade offers Trade is a great source of livelihood. Traders are usually the richest people. That’s why Sharia has imposed zakat on trade offers to thank Allah on this blessing. Allah imposes it to purify the trade and its profits from the dirty money that may be associated with it and to help the poor and the needy who see and observe this wealth. Trade offers means: What is prepared for buying and selling by any kinds of money. The Quran and Sunnah indicate that it is obligatory to pay zakat on it. Allah says in the Quran: (Take, (O, Muhammad), from their wealth a Sadaqah (i.e., Zakat) by which you purify them and cause them increase, and invoke [Allah’s blessings] upon them) [At-Tawbah: 103] Allah the Almighty commands to take zakat from Muslim’s wealth and the trade wealth is one of the most important wealth. Among Sunnah references on Zakat: Samurah bin Jundub (RAA) narrated that The Prophet used to command us to pay Zakat from (the goods) we had prepared for sale. (Abu Dawud). (7) Alensaf Ma› Alsharh Alkabir, 339/6 3.5.1 Conditions for zakat obligation in trade offers The general conditions for zakat obligation and the special condition of trade wealth shall be required for zakat obligation in trade offers Among the general conditions for zakat are: Reaching the quorum and the trade wealth quorum is: The equivalent of the lower value of gold or silver quorum. If the goods value is equal to the quorum of any one of them, zakat is due on it. If it does not reach the quorum in itself, but becomes equal after adding it to the cash or other trade wealth, zakat shall also be due on it. For example: If the zakat payer has goods of SAR 150, and the quorum of silver is SAR 200, zakat shall not be due on these goods as they don’t reach quorum of gold nor silver. If he has cash money of SAR 70, for instance, the zakat here becomes due on the total (goods + cash money) as the total is SAR 220 so it reaches quorum. He shall pay a quarter of a tenth. Including: If a full year has passed since the goods reached the quorum, zakat becomes due. Transferring the wealth from being trade offers to being cash money and returning it back to trade merchandise shall not separate the calculation of the year. However, the calculation of the year shall be valid as trade means flipping the money for profit. If the flipping separates the year, zakat would not have been due on trade wealth. If a year passes on the trade wealth, zakat becomes due. There is a special condition for trade wealth, which is: The intention of trading in the goods upon acquiring it, as the owner of the goods intends to trade in it upon acquiring it. If he does not intend to trade in it, zakat shall not be due. For example: If he has clothes with the intent of trading, zakat shall be due on them. If he does not intent to trade in these clothes but he intends to wear or give them as a gift, zakat shall not be due on them. Likewise, if he has cars and intends to trade in them, zakat shall be due on them. If he intends otherwise such as using them, zakat shall not be due on them. If the above-mentioned conditions are met in the goods, zakat shall be due. At the end of the year, the trader shall estimate the goods he has and pay zakat on it. If another year passes, he shall pay zakat on it again and its profits and so on every year.