Zakaah on Trade Goods
One has to pay zakaah on all the wealth that you have in the form of cash or products offered for sale in the stationery store after one full (Hijri) year has passed, if their value meets the minimum threshold for zakaah (nisaab). Fataawa al-Lajnah al-Daa’imah, 9/313.
The way in which the zakaah on trade goods is worked out is based on their market value (which is usually the price for which they are sold in the store) after one full year has passed, whether this price is equal to the price paid for them or it is more or less. And if the businessman is one who sells wholesale, then he should base his zakaah on the wholesale price, and if he is one who sells retail, then he should base his zakaah on the retail price. Then zakaah should be paid at the rate of one-quarter of one-tenth (i.e., 2.5%). (Risaalah fi’l_Zakaah by Shaykh Ibn Baaz, p. 11; Risaalah fi’l-Zakaah al-‘Aqaar by Shaykh Bakr Abu Zayd, p. 8), Al-Sharh al-Mumti’, 6/146, al-Mughni (4/249) al-Mawsoo’ah al-Fiqhiyyah (13/171), Majmoo’ Fataawa Ibn Uthaymeen, 18/205; see also 18/240, Fataawa al-Lajnah al-Daa’imah, 9/324, Fataawa al-Lajnah al-Daa’imah (9/319), Majmoo’ Fataawa Ibn ‘Uthaymeen, 18/233.
Zakaah on Equipment or Company Fixed Assets
There is no zakaah on equipment, unless they are prepared or put for sale. There is no zakaah on items that are for use, whether they are tools or other things. The basic principle is that whatever is prepared for sale is that on which zakaah is due. Tools or equipment used in the store are not subject to zakaah. Fataawa Ibn Baaz, 14/184.
Company buildings, heavy and light machinery and vehicles that are used to transport goods or company workers are not subject to zakaah. The early scholars stated that the tools of craftsmen such as carpenters, builders, blacksmiths and the like are not subject to zakaah. Al-Kasaani said in Badaa’i’ al-Sanaa’i’ (3/398): As for the tools of the craftsman and the buckets and containers, they are not trade goods, because they are not usually sold with the goods. Kashshaaf al-Qinaa’ (168/2) Majallat al-Majma’ al-Fiqhi, 4/1/722, Majmoo’ Fataawa Ibn Baaz, 14/184
Zakaah is due on the rental fees paid if they are rented out, after one year has passed, if that reaches the nisaab. If the owner of a company enters into contracts and uses these machines to fulfil the contracts, then the zakaah should be paid from the profits earned from these contracts, after one year has passed, but no zakaah is due on the machines themselves or on their value, because they have not been prepared for sale, rather they have been prepared for use. Fataawa al-Lajnah al-Daa’imah, 9/345
Also, no zakaah is required of a man for what he keeps of vessels, furniture, tools, cars, property etc, even if he has prepared them for renting out. If a person owns many properties that are worth millions, but he does not deal in them by buying or selling, rather he prepares them for using or renting, then no zakaah is due on these properties, even if they are many. Rather zakaah is due on what he earns from them in rental payments or income; zakaah must be paid on rental income when one year has passed since the beginning of the contract because the Prophet (peace and blessings of Allaah be upon him) said: “The Muslim does not have to pay zakaah on his slave or his horse.” Majmoo’ Fataawa Ibn ‘Uthaymeen, 18/254.
O Allah, we hope for Your mercy, do not leave us for even the duration of an eye blink (duration) and correct our total condition and grant us understanding. Besides You there is none worthy of worship.