I have a shop in which there is equipment worth 80,000 riyals, and there are people who owe the shop debts totalling 80,000 riyals. There was a fire in the shop 6 months ago and new merchandise has been and renovations have been done, which together add up to 40,000, of which 35,000 has been borrowed in the name of the shop, to be paid back in instalments.
My first question is: should we pay zakaah on the total amount of equipment that was in the store before the fire? Total cost + debts – new stock and renovation.
My second question is: A full year has not yet passed since the renovations; should we pay zakaah on it or only on the whole shop and the debts that we are owed?.
Praise be to Allaah.
The goods
that are found in a shop fall into two categories:
1 – Those
that are prepared for sale, whether they are real estate, food, clothes, or
other kinds of goods that are sold.
2 – Those
that are not prepared for sale, rather they are for producing goods or are
to be used, such as manufacturing equipment, cars, furniture, cameras and
computers, etc.
The first
category are those that are called “trade goods” and these are the ones on
which zakaah must be paid. As for the second category, they are known as
fixed assets, and no zakaah is due on them.
In the
answer to question no. 42072
we stated that it is obligatory to pay zakaah on trade goods, and we
explained the nisaab (minimum threshold), and the fact that fixtures that
are not prepared for sale are not subject to zakaah.
In the
answer to question no. 22449
we explained that it is permissible to pay zakaah on trade goods in kind,
and that it does not have to be paid in cash.
For
information on how to calculate zakaah on trade goods, please see the answer
to question no. 26236, in
which it explains that zakaah is to be paid on the sale price, not the
purchase price.
Conclusion:
If the time
for paying zakaah on your shop has come, then you should take stock of what
you have in the shop, such as the goods that you have there, and add them to
whatever you have of cash, and add that total to the debts that you hope
will be paid back, then pay zakaah on the total at a rate of one-quarter of
one-tenth.
As for the
debts which you have no hope that they will be paid back because they are
owed by people who delay payment or who are poor, then no zakaah is due on
them until you take possession of them and start to reckon a new year from
the day you receive them. In order to be on the safe side, when you receive
them pay zakaah for one year only, even if several years have passed. See
question no. 1346.
The debts
that you owe are not to be deducted from the wealth on which you have to pay
zakaah, according to the more correct scholarly view. See question no.
22426.
The goods
that were lost in the fire are not to be added to the total of goods in the
store.
As for the
things that you put in the store after the fire, if they have to do with
furnishings, décor and fixtures, then as we have stated above, no zakaah is
due on them, so they should not be included among the goods in the store
that are subject to zakaah. If they are goods that are for sale, then if you
bought them with the shop’s funds and profits, then zakaah should be paid on
them when you pay zakaah for the shop’s good even if one year has not yet
passed. If you bought them with other money that does not belong to the
store, then you should count one year from the time when you acquired the
wealth with which you bought them.
We ask
Allaah to compensate you with good and to bless you with a goodly
provision.
And Allaah
knows best.
