According to Language:
The word ‘saham’ originates from Arabic, meaning a portion or share that is owned.
According to Terminology:
According to the Kamus Dewan, saham means “a share in the capital of a business.”
According to the Economic Dictionary, saham refers to the legally issued capital of a company contributed by its owners.
Shares are money invested in a company or business. For share certificates in a company listed on the stock market (e.g., Bursa Malaysia), they can easily be converted into cash compared to shares in unlisted companies or cooperatives.
Shareholders are owners of the company and share in the profits or losses of the business. The performance of a business is usually measured through the dividends distributed and the price or value of the shares as listed on the stock market.
The evidences and arguments for paying zakat on investments are as follows:
Firman Allah s.w.t:
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 believe! Spend (in zakat) out of the good things you have earned, and out of what We have produced from the earth for you.”
(Surah Al-Baqarah: Ayah 267)
The Prophet Muhammad s.a.w said, as narrated by Samrah:
“The Messenger of Allah (peace be upon him) commanded us to pay zakat on goods prepared for trade.”
(Hadith narrated by Abu Dawud)
Dalil Athar
The Prophet Muhammad s.a.w said:
Narrated from Abi ‘Amr Ibnu Himas from his father, he said: “He sold skins and quiver containers made of leather. Then Umar Ibn Khattab came to me and asked: ‘Did you give sadaqah (zakat) on your wealth?’ I replied: ‘Yes, Amirul Mukminin, it is leather.’ Umar said: ‘Estimate its value and then give its sadaqah.’”
(Hadith narrated by Syafi’i, Daruqutni, and Baihaqi)
The conditions are as follows:
Obligatory for Muslim Owners Only
Must have the power to sell and derive benefits from the stock portfolio or investment.
Shares or investments owned by mosques, suraus, and funds for public benefit are not subject to zakat.
The nisab for an investment portfolio is equal to 85 grams of gold (20 mithqal). Zakat is obligatory if the portfolio value equals or exceeds the nisab.
The haul for shares and other investments must be one full year of ownership.
The shares must be issued for operations of halal core businesses.
In Malaysia, the Securities Commission (SC) is the body responsible for regulating and supervising the capital market or stock market. The capital market serves as a primary platform for generating funds and long-term investments, as well as enhancing the liquidity of the financial system. Within the capital market, all types of shares and funds are traded.
Examples of investment instruments in the capital market include:
Ordinary and preference shares
Unit trusts, whether managed by private or government fund managers
Real Estate Investment Trusts (REITs)
Exchange-Traded Funds (ETFs)
Other investment instruments traded on Bursa Malaysia or foreign capital markets
In general, there are four main categories of capital market products:
Equity (Shares / Unit Trust / REITs / Index Fund / ETF, etc.)
Bonds & Debentures
Derivatives (Options & Futures)
Structured Products
The zakat payable is 2.5% of the investment value at the end of the haul. For traded investments, any profits realized during the year must be included.
| Example of Zakat Assessment | |
|---|---|
|
Shares on Bursa Malaysia |
RM 266,000 |
|
Realized profit from investment trading |
RM 80,000 |
|
Unit Trusts |
RM 50,000 |
|
Exchange Traded Funds |
RM 50,000 |
|
Real Estate Investment Trusts |
RM 70,000 |
|
Other investment in foreign capital markets |
RM 30,000 |
Note: All the values of shares and investments above are based on their market value on the date the haul is complete.
| Less | |
|---|---|
|
Brokerage cost |
RM 1,500 |
|
Dividends from non-shariah compliant investments |
RM 30,000 |
|
Capital appreciation of non-shariah compliant investment |
RM 50,000 |
|
Sum of installment in assessment year for loan taken to buy investment – if any |
– |
|
Value of shares & investments that subject to zakat |
RM 464,500 |
|
Zakat : RM456,000 x 2.5% = |
RM 11,610 |
For shares owned by private companies or cooperatives, the Selangor State Fatwa Committee has decided the ruling on zakat as follows:
Zakat on shares is obligatory for the company based on the principle of khultoh (pooled assets). However, if the company does not pay zakat, the obligation falls on the individual shareholders.
The calculation follows the company business zakat method (private and public companies) approved in the Selangor State Fatwa Committee meeting on 26 March 2007 (refer to LZS Business Zakat Guide 2007).
Briefly, company business zakat is calculated using two methods:-
Zakat is imposed on the individual based on the percentage of their shareholding in the company.
Example Calculation
Zakat is imposed on the individual based on the percentage of their shareholding in the company.
Zakat Selangor Hotline : 1-300-88-4343
Email : maklumbalasaduan@zakatselangor.com.my
