Chapter on Zakat for Commercial Merchandise

It has already been established that zakat is obligatory only on cash (gold and silver), agricultural produce, and livestock. As for all other property—houses, slaves, garments, assorted household goods, riding animals, every other creature, and all movable assets—no zakat is due on any of them unless they are acquired for trade. If they are bought expressly with the intention of trading and that intention is not later shifted to personal use, their ruling is the same as that of gold and silver: when a full lunar year passes, the merchant appraises them at their current market value.

He then pays the zakat out of the liquid cash (nāḍ) he has on hand. This applies to the mudir, the merchant who is constantly reinvesting and circulating his capital, provided that during the course of the year some ready cash—gold or silver—has accrued to him. He values it according to whichever of the two currencies predominates in the local market; if the amount reaches the nisab, he pays zakat on it.

Anyone who continually exchanges one type of merchandise for another and never receives cash, however, is not liable for zakat according to Mālik and most of his disciples; this is the authoritative position of the school.

Ibn al-Mājishūn and Mutarrif have transmitted from Mālik, regarding the mudir