Assalam o Alaikum I have invested some money as a sleeping partner with Islamic Bank in form of shares / certificates for 07 years with sole intention of only gaining annual profit / dividends. I do not have any intention to engage in any trade of shares / certificates. The bank further invests that money in providing Islamic financing to its customers (Ijara, Musharaka, Murabaha, Istisna, Salam etc.). Now regarding the obligated Zakaah, as I holds shares / certificates in the bank with the sole intention of benefiting from the annual profits of the shares, and not for the purpose of trading in those shares / certificates, so I should pay the zakaah similar to that is paid on things that are rented out, in accordance with the resolution of the Islamic Fiqh Council (Majma’ al-Fiqh al-Islami) passed during its second session, with regard to the zakaah on real-estate and non-agricultural land that is rented out. This resolution says. فإن كان ساهم في الشركة بقصد الاستفادة من ريع الأسهم السنوي ، وليس يقصد التجارة لأنه يزكيها زكاة المستغلات وتمشياً مع ما قرره مجمع الفقه الإسلامي في دورته الثانية بالنسبة لزكاة العقارات والأراضي المأجورة غير الزراعية ، فإن صاحب هذه الأسهم لا زكاة عليه في أصل السهم ، وإنما تجب الزكاة في الريع ، وهي ربع العشر بعد دوران الحول من يوم قبض الريع مع اعتبار توافر شروط الزكاة وانتفاء الموانع . المجمع الفقهي الإسلامي عام 1408 This means that I am not obliged to pay zakah on the actual value of share / certificate rather I will have to pay zakah only on profit (one year from the day I received). Please correct me if my understanding is true or not. Please see the same answer by Islamqa.com http://www.islamqa.com/ar/ref/110144 http://www.islamqa.com/ar/ref/21574/ salam
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger.
We have read the two Fataawa you referred us to, and it seems that you did not notice that the second Fatwa is about Zakah on estates and rented land, so it does not apply to your case except in the percentage of the bank’s shares allocated to rent, but the first Fatwa needs some clarification. Therefore, if you had contributed in the bank for the purpose of benefitting from the annual income of the shares and not for the purpose of trading in the shares themselves, then you do not have to pay Zakah on the very shares; rather, you should only pay Zakah on the revenue you get from them if it reaches the Nisaab (minimum about liable for Zakah) by itself or with other money or tradable items added to it provided a whole lunar year elapses over it on the condition that the bank puts its shares in constant assets, like estates, ships, factories and the like, because in this case you should pay Zakah on these kinds like the Zakah on exploited items, such as estates and the like.
On the other hand, if the bank in which you contributed invests in Muraabahah (in which it purchases the item and then sells it to a customer by installments with profits after it had actually possessed it), or Istisnaa’ [in which it concludes a contract with a worker to manufacture something with some particular features] or Salam [in which it agrees with a person to hand him some given goods with some particular characteristics at a particular price and at a determined time] and so forth, as you mentioned, then you are obligated to pay Zakah on the items that are related to these transactions in the same manner you pay Zakah on tradable items, in which case, you should pay Zakah on the shares and its profits altogether, even if you had intended to only benefit from its profit.
As regards the investment certificates, then if you invest in a bank that abides in its dealings and transactions by the Sharee’ah, then you are obligated to pay Zakah as we clarified above. But if the investment certificates are of the forbidden kind, then the Zakah must be paid on the capital money only without the profit while it is an obligation to repent to Allaah and get rid of the interests as we clarified in Fatwa 88340.
It is a well-known fact that in investment certificates, the banks lend and borrow money with interest in a way that the capital money that the customer puts in the bank becomes guaranteed, and the bank gives him a profit, then this kind of certificates is forbidden. So, if this is the method that is followed in your bank, then the investment certificates are forbidden.
Indeed, a Muslim should abide by the Sharee’ah in his transactions and it is not permissible for him to invest his money in a company or in a stock market whose transactions are forbidden in the Sharee’ah, because through his contribution in it, he becomes a partner according to the amount of the shares that he owns in it. Needless to say, it is forbidden for a Muslim to participate in any work that contains a religious prohibition even if this was in a non-Muslim country.
Allaah Knows best.
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