Answered by Ustadh Tabraze Azam
Question: Assalam alaykum
If I buy 1000 pieces of trade goods for 1€ each, do I have to pay zakat on the market value? Let’s say the sales price is 7€. Does it mean that I have to pay zakat on 7000€ ?
How should I count the sales tax or other expenses like selling on ebay who requires you to pay a percentage of the sales price to them?
Answer: Wa alaikum assalam wa rahmatullah,
Generally, and with regards to calculating the net worth of trade goods in your possession, you should use their current market value.
Note that there are usually three sets of valuation: (1) the cost or wholesale price, which is the price you most likely paid to purchase the goods, (2) the current market value, and (3) the retail price, which you listed in your question as the sale price, namely, something which can be self-determined.
If there are liabilities which are due, whether for the purposes of tax or other general overheads, these can be deducted when calculating your net zakatable assets.
Please also see: Is Your Zakat Due? – A Reader and Resources on Giving Zakat and: Zakat: A Comprehensive SeekersHub Reader and: Years of Past Due Zakat, and Zakat on Non-Selling or Damaged Trade Goods
And Allah Most High knows best.
[Ustadh] Tabraze Azam
Checked and Approved by Shaykh Faraz Rabbani
Ustadh Tabraze Azam holds a BSc in Computer Science from the University of Leicester, where he also served as the President of the Islamic Society. He memorised the entire Qur’an in his hometown of Ipswich at the tender age of sixteen, and has since studied the Islamic Sciences in traditional settings in the UK, Jordan and Turkey. He is currently pursuing advanced studies in Jordan, where he is presently based with his family.