Praise be to Allah.
How to give zakah on trade goods
Zakah on trade goods must be paid on everything that a Muslim is offering for sale with the intention of engaging in trade or making a profit, if the value thereof reaches the minimum threshold (nisab ) by itself or when added to what he owns of gold, silver or cash. This is because of the report narrated by Abu Dawud in his Sunan with a hasan isnad from Samurah ibn Jundub, who said: The Messenger of Allah (blessings and peace of Allah be upon him) used to instruct us to give zakah on what we had prepared for sale .
The nisab (minimum threshold at which zakah becomes due) is the equivalent of 595 grams of silver.
Zakah on computer apps and software programs
Based on that, if someone produces these apps and programs and offers them for sale, and they reach the minimum threshold, then he must work out their value when one full Hijri year has passed, based on the current market value, then give one quarter of one tenth (2.5 %).
If they are sold before one full Hijri year has passed, then zakah must be paid on their price when the year is complete. If he invests that money in buying more goods for sale, he must give zakah on these goods when one year is completed.
If the year will be completed in Ramadan, and he sells the product before Ramadan, he should give zakah on whatever he has in his possession of its price in Ramadan. If he invests it in buying other products for sale, he should work out the value of these new products in Ramadan, and give zakah on it.
He should also add to that what he is owed of debts that he hopes will be repaid, and give zakah on the total amount when the year is completed.
Should we pay zakah on software programs which are not for sale?
If the program is not for sale; rather the one who wants it may use it in return for a payment, whilst ownership remains in the hands of the producer, then that is not subject to zakat on trade goods. Rather the money that the company acquires in return for letting its customers use this program is subject to zakat on cash, if this money reaches the minimum threshold and one full Hijri year has passed.
If the seller acquires enough of these payments to reach the minimum threshold, by itself or when added to other wealth that he has, and one full hijri year has passed, zakah must be paid on it, at a rate of one-quarter of one tenth.
And Allah knows best.
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