How is trade zakat calculated for a company, and is zakat obligatory on annual profits and income, or on net profits after approved expenses? Is zakat obligatory on debts owed to me or by me to others? Can the same wealth be subject to both money zakat and trade zakat?
The on trade goods is calculated after a full hawl (lunar year) as follows: 1. Medical devices, endoscopes, and everything intended for sale are appraised at market price at the time zakat becomes due. What is intended for rent is excluded; the zakat on it is on its profit if it reaches the and a hawl has passed over it, or after it is added to the appraised money. 2. Hoped-for debts are added to what has already been appraised. 3. Your outstanding debts are deducted. 4. Profits are added to the principal capital.
After that, zakat is paid if the wealth reaches the nisab (85 grams of gold), and its amount is a quarter of a tenth (2.5%). Unhoped-for debts do not require zakat until they are collected. When collected, zakat is paid for one year, and it is better to pay it for the past years upon collection.
Zakat is calculated on the principal capital and the remaining profits at the beginning of the hawl, not on all profits throughout the year. A person can spend from permissible profits before the hawl is due. Wealth is only subject to zakat once a year, unless it is a debt owed by another person, in which case it might be subject to zakat twice.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy