Zakat on commercial goods

The obligation: Book, Sunna and consensus

Zakat on goods held for sale is obligatory by the Quran: « Take from their wealth a charity » (Surah at-Tawba, 103), « O you who believe, spend from the good things you have earned » (Surah al-Baqara, 267), a verse al-Hasan and Mujahid read on lawful trade, which al-Bukhari made a chapter title in his Sahih. The Sunna attests it through Samura ibn Jundub: « The Messenger of Allah used to order us to pay the charity from what we prepared for sale » (Abu Dawud 1562, ad-Daraqutni, al-Bayhaqi; a good chain per Ibn Abd al-Barr), and through the story of Khalid ibn al-Walid, accused of withholding the zakat of his armour and horses kept for trade, whom the Prophet (peace and blessings of Allah be upon him) cleared because he had devoted them to Allah: had they not been zakatable, the claim would have been baseless (al-Bukhari 1399, Muslim 983). Consensus is reported by Ibn al-Mundhir, Abu Ubayd, Ibn al-Qattan and Ibn Taymiyya: « The four imams and the whole community, except the deviant, agree on its obligation in trade goods ».

The decisive condition: the intention of trade

The jurists agree that zakat on merchandise requires the intention to sell for gain, formed at the time of acquisition. Buying clothing, furniture or a vehicle for use is not trade: the item remains a use-good, outside zakat, as long as the intention does not change, the change occurring by intention alone for the majority, or by intention and act for the Hanafis, who require a purchase to move a use-good into trade. One who inherits merchandise remains under the use regime until he buys in order to sell, per al-Baji. One who buys to rent, intending to sell if profit appears, owes zakat per the preponderant Maliki view; the Hanafi who buys a mount to resell and rides it while awaiting the buyer does not take it out of trade.

Threshold and year in value

The threshold of merchandise is calculated in value: the goods are appraised in gold or silver on the day the year completes, without needing to own the metal itself. Hanbalis and Abu Hanifa appraise by whichever assessment favours the poor, gold or silver; one narration of Abu Hanifa leaves the choice to the owner. Shafiites hold the reliable view of appraisal at the end of the year; Hanbalis do not distinguish trade goods from other wealth regarding the threshold throughout the year.

Payment: in value or in kind

The original position among the jurists is to pay a quarter of the tenth of the value in money, which suffices by agreement. Paying from the merchandise itself divides the schools: Malikis, dominant Shafiites and Hanbalis refuse it, since the threshold is counted in value and zakat rises and falls with value, not quantity; Abu Hanifa and the early al-Shafii give the owner the choice between kind and value. Ibn Taymiyya notes that giving the poor goods they need is acceptable, but a merchant's self-appraisal may harm the poor; money is safer, or selling and handing over the price.

Immobilised stock

One who holds back his goods for a higher price: the majority (Abu Hanifa, al-Shafii, Ahmad) makes no distinction and imposes zakat every year, per « no zakat on wealth until a year passes over it ». The Malikis suspend it and claim it at the time of sale, for a single year, following their rule on non-rotating goods.