Guidelines

Estimating the trade offers and paying its zakat The zakat on trade offers is quarter of a tenth (2.5%). After one year passes on it, the trader estimates it on that day, by calculating it at their current price in the market, whether this price is equal to, less or more than its price at the time of purchase. The value shall be added to the money available in the store and the debts owed to him by customers then a quarter of a tenth shall be paid. If he purchases the goods for SAR 1000, each piece for SAR 10, and after one year, he still has some of them, and their price becomes SAR15, he shall pay zakat on the remaining pieces at the price of SAR 15. If he has 20 pieces × SAR 15 = SAR 300 To know the quarter of a tenth, divide it by 40; SAR 300 ÷ 40= SAR 7.5 There is no zakat on the expenses the trader spends from the store’s profits before the end of year. Moreover, there is no zakat on the debts he pays to third parties before the end of the year. The goods that are sold at a deferred price to customers shall be zakatable if the customer is able to pay without procrastination. If the customer is procrastinator or bankrupt, he shall pay zakat on it if he receives its price and one year passes as mentioned in zakat on debts. It is better for the trader to pay the zakat on trade offers from the money if available. If money is not available, or if it will be more beneficial for the poor to pay the zakat from the goods, zakat may be paid from the goods. For instance, if he is a cloth trader, he shall pay it from the clothes. If the amount he must pay is SAR 1000, he must present clothes with a value of SAR 1000. 3.6 Zakat on Stocks Stock is: The partner’s share in the company’s capital, represented by a negotiable instrument. Stocks may be used for investment (holding them and benefiting from their earnings), or for speculation (flipping them in the market for profit). As for the stocks intended for investment, the company’s zakatable assets are considered and then, zakat shall be paid on them. As for non-zakatable assets, there is no zakat on them, such as properties, offices, factories, cars intended for use, etc. ZATCA collects the zakat from the shareholding companies in the Kingdom. Accordingly, the shareholder is satisfied that the company pays the zakat on his behalf. As for the stocks intended for speculation, zakat shall be due on them with their profits like trade offers zakat. The price of stock is considered on the day when zakat is due and zakat payer pays the value of one quarter of a tenth. 3.7 Zakat on Sukuk Sukuks are the instruments, bonds and the like Sukuks are documents of equal value, representing common portions in the ownership of real estate, utilities, services, or in the assets of a specific project or private investment activity, after collecting the value of such sukuk, closing the subscription, and starting to use them for the purpose they were issued for. Sukuk may be used for investment (holding them and benefiting from their earnings), or for speculation (flipping them in the market for profit). If they are intended for investment, zakat shall be due on them as per their assets, considering the zakatable money they contain, such as cash, trade offers, livestock, etc. as they are zakatable. If the sukuk is intended for speculation: Zakat shall be due with their profits like trade offers zakat. They shall be estimated on the day when zakat is due at the market price, then the zakat payer shall pay a quarter of a tenth of their value. If one owns one hundred sukuks, value of each on the day when zakat shall be due is twenty riyals, total value of the sukuks shall be two thousand riyals (SAR 2000). Zakat payer shall pay one quarter of a tenth of them, which is fifty riyals.