I am investing in a dairy business. Do I have to pay zakaah on the cows owned by this business, or on the net profits that result from it, as is the case with investments in real estate or cars? How can we pay the zakaah for agricultural corporations which produce agricultural and dairy products – knowing that their shares are traded on the market. May Allaah reward you and guide you.
Praise be to Allaah.
Zakaah is obligatory on the money that is made from the profits of the business, if it reaches the nisaab (minimum amount) and one full (hijri) year passes from the time when the money was obtained. The rate of zakaah is one-quarter of one-tenth, i.e. 2.5%. Zakaah is also due on the profits of the shares in agricultural and dairy businesses and the like, if they reach the nisaab and one full (hijri) year has passed, if they are purely for investment. However, if they are shares which are for sale, the zakaah is payable on them and on their profits. And Allaah is the Source of strength. May Allaah bless our Prophet Muhammad and his family and companions, and grant them peace.