Investment Obligatory Requirement
Evidence and arguments for issuing zakat investments are as follows
يَٰٓأَيُّهَا ٱلَّذِينَ ءَامَنُوٓا۟ أَنفِقُوا۟ مِن طَيِّبَٰتِ مَا كَسَبْتُمْ وَمِمَّآ أَخْرَجْنَا لَكُم مِّنَ ٱلْأَرْضِ ۖ وَلَا تَيَمَّمُوا۟ ٱلْخَبِيثَ مِنْهُ تُنفِقُونَ وَلَسْتُم بِـَٔاخِذِيهِ إِلَّآ أَن تُغْمِضُوا۟ فِيهِ ۚ وَٱعْلَمُوٓا۟ أَنَّ ٱللَّهَ غَنِىٌّ حَمِيدٌ ٢٦٧
“O you who have believed, spend from the good things which you have earned and from that which We have produced for you from the earth”
(Surah Al-Baqarah : Verse 267)
Hadis Rasulullah daripada Samrah katanya: “Adalah Rasulullah S.A.W menyuruh kami mengeluarkan zakat daripada barang- barang yang disediakan untuk jual beli.”
(Hadis riwayat Abu Daud)
Daripada Abi ‘Amr Ibnu Himas daripada bapanya, dia berkata: “Dia menjual kulit dan bekas panah daripada kulit. Kemudian Umar Ibn Khattab singgah padaku. Dia bertanya: “Adakah engkau keluarkan sadaqah (zakat) hartamu?” Aku menjawab: ‘Aku menjawab: Ya Amirul Mukminin, sesungguhnya ia adalah kulit.” Umar berkata: “ Taksirlah kemudian keluarkan sadaqahnya.”
(Hadis riwayat Syafi’I, Daruqutni, dan Baihaqi)
Investment Zakat Obligatory Requirements
The terms are as follows:
Compulsory to Muslim owners only.
- Perfectly Owned
have the power to sell and benefit from stock or investment portfolio.
- Property of a Party
shares or investments owned by mosques, surau, and-funds for general maslahah and the like, non-obligatory zakat.
- Sufficient Nisab
Investment portfolio Nisab is the same value as or 85 grams of gold (20 mithqal). When the value of the investment portfolio equals or exceeds the nisab then it is obligatory to pay zakat.
- Sufficient Haul
The haul of stocks and other investments should be completed within one year of the investment portfolio.
Shares issued for halal core business operations.
Definition of Investment Zakat
According to the Language: The word ‘share’ is derived from the Arabic word meaning the part owned.
According to Terms :Shares by Chamber Dictionary mean “Part of the capital of a business.”
According to theEconomics Dictionary, shares mean the legitimate authorized capital of the company.
Shares are money invested in a company or business. For stock certificates in a company listed on the stock market (Example of Bursa Malaysia), it is easy to make cash compared to stocks in unlisted or cooperative companies.
The stock owner is the owner of the company and shares the profit or loss of a company. The performance of a business can usually be measured by dividend distributed and also the price or value of the shares as listed on the stock market.
Capital Market Investment (Bursa Malaysia)
In Malaysia, the Securities Commission (SC) is the body responsible for controlling and overseeing capital markets or stocks. The capital market is a major home which provides for long-term fund-raising and investment activities and enhances the liquidity of the financial system. In this capital market all types of shares and funds are transacted.
Among the examples of investment instruments in the capital market are:
- Ordinary & preference shares (ordinary & preference)
- Trust Fund, either through a private or government fund manager
- Property Trust Shares (REITs)
- Exchange Traded Funds (ETFs)
- Other investment instruments traded on Bursa Malaysia or overseas capital markets
In general, there are 4 main categories of products in the capital market namely:
- Equity (Stock / Unit Trust / REITs / Index Fund / ETF etc.)
- Bonds & Debentures
- Derivatif (Option & Future)
- Structured Products
Assessment Methods for Investment Zakat
- Shares are money invested in a company or business. It is as proof of the selection of a business.
- For stock certificates in a company listed on the Stock Exchange, it is easy to make cash compared to stocks in unlisted or co-operative companies.
The required zakat value is 2.5% of the value of the investment at the end of Haul. For investments traded, the amount of profits performed over the year should be added.
METHOD OF CALCULATION
|Examples of Estimates|
|Shares of shares on Bursa Malaysia (Shares)||RM266,000|
|Profit from investment sale (realised profit from investment)||RM80,000|
|Exchange Trading Fund (Exhange Traded Funds)||RM50,000|
|Real Estate Investment Trusts||RM70,000|
|Other investments in foreign capital markets||RM30,000|
|Note : All the above value of shares & investments are market value at fairly low interest dates..|
|Dividends from non-shariah compliant investments||RM30,000|
|Increase in capital appreciation of non-shariah compliant investment||RM50,000|
|Amount of installments paid in the year of assessment for repayment of stock purchase loan – if any (Sum of installment in assessment year for loan taken to buy investment – if any)||–|
|Value of shares & investments that subject to zakat||RM464,500|
|Zakat : RM456,000 x 2.5% =||RM11,610|
Investment Zakat Is Not Listed In The Associate Company, Cooperative etc.
For zakat of shares owned by a private company or cooperative, the Selangor Fatwa Committee Meeting decided that the zakat law on it is as follows:
Zakat share is obliged to be issued by the company under the law of khultoh (mixed property). However, if the company does not pay zakat, the obligation of zakat must be fulfilled by the individual.
Scenario 1: Company Paying Zakat
As per the company’s (private and public) business zakat method approved at the State Fatwa Committee Meeting on 26 March 2007 (see the LZS 2007 Zakat Business Zakat Guide).
The company’s business zakat briefly follows the following two methods :-
- Working Capital Method = (Current Assets – Current Liabilities) +/- Adjustments
- Developed Capital Method = (Equity Owner + Long Term Liability – Fixed Assets – Non-Current Assets) +/- Adjustments
Scenario 2: Companies Do Not Pay Zakah
Zakat is charged on individuals based on the percentage of individual holdings in the company.
Examples of estimates:
The company / cooperative’s obligation of zakat at the end of haul 2012 is RM10 million.
- Business Zakat of ABC Company: RM10 million x 2.5% = RM250,000
- Holdings of En.Ali’s shares in Syarikat ABC Sdn Bhd: 15%
- En.Ali Investment Zakat: 15% x 250,000 = RM37,500