Zakaah on shares

Question: 65722

I work in the field of buying and selling Saudi shares, and the way I work is that I sell the share as soon as the price rises and I am able to make a profit, and I do not wait for reports about the companies’ profits.

My question is: I bought some shares in the electrical company five months ago for 172 riyals per share. After I bought them, they went down to 147 riyals and have not yet gone back up to the purchase price. Is there any zakaah due on these shares? How should the zakaah be paid? Is it based on the purchase price or the current price which is 147?.

Praise be to Allah, and peace and blessings be upon the Messenger of Allah and his family.

These shares are now regarded as trade goods, because trade
goods are anything that is prepared for sale. So zakaah is due on them.

The zakaah on trade goods is worked out on the basis of their
value at the end of the year, whether it is more than the purchase price or
less.

See question no. 65515

Based on this, if these shares reach the nisaab, or they
reach the nisaab when added to the cash money that you have, then you should
pay zakaah on them according to their value on the day when the year ends.

Shaykh Ibn ‘Uthaymeen said:

The way in which zakaah
is paid on shares in companies is as follows: if the state undertakes the
mission of calculating and collecting the zakaah, then you have discharged
your responsibility, otherwise zakaah must be paid in the following manner:
they should be evaluated every year and one-quarter of one-tenth should be
paid, if the purpose of them is to trade. But if the purpose is investment,
then no zakaah is due on them, but zakaah is due on any profits they produce
if it is in the form of money and one year has passed. End quote.

Majmoo’ Fataawa Ibn ‘Uthaymeen,
18/196

The Standing Committee was asked: Is there any zakaah on
shares and certificates? How should it be paid?

They replied:

Zakaah is due on shares
and promissory notes if they represent money or trade goods, so long as the
one who is keeping the money is not going through hardship or delay payment
unduly. End quote.

Fataawa al-Lajnah al-Daa’imah,
9/354

The Standing Committee was also asked about shares through
which one buys land and real estate.

They replied:

The shares mentioned in the question are a kind of trade
goods, so zakaah must be paid on them, to be evaluated every year according
to their current value, not the purchase price. If the owner has money he
may pay from that, otherwise he should pay the zakaah for past years from
their value after selling them and taking the money. End quote.

Fataawa al-Lajnah al-Daa’imah,
9/353

Shaykh Ibn ‘Uthaymeen
(may Allaah have mercy on him) was asked: Should zakaah on shares be based
on the official value of the share or on the market value, or what?

He replied:

Zakaah on shares and other trade goods should be based on the
market value. If it was worth one thousand at the time of purchase, then the
value rises to two thousand at the time when zakaah becomes due, then zakaah
should be based on the value of two thousand, because what matters is the
value of a thing when zakaah becomes due, not when it is bought. End quote.

Majmoo’ Fataawa Ibn ‘Uthaymeen,
18/197

It should be noted that
if trade goods are bought with gold or silver or cash (riyals, dollars or
other currencies), or with other goods, then the year for those goods starts
from the time when one acquired the wealth with which one bought them. Based
on this, the new year does not start from the time when one takes possession
of the new goods, rather it starts from the time when one acquired the
wealth with which one bought them.

See question no. 32715

And Allaah knows
best.

Source:

Islam Q&A

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