The Fatwas delivered by the Islamic Jurisprudence Academy in Jeddah (Islamic Conference Organization)

After the Academy surveyed the different studies submitted about "Zakah on Debts" and after detailed discussion on the subject, the following has been decided:

• There is no Qur'anic verse or a Prophet's Hadith regarding the subject.
   

• The Companions and their followers hold different points of view on how to give Zakah on debts.
   

• Therefore, Juristic Schools hold different opinions on the same subject.
   

• These different opinions are based on the controversial point whether Zakah is due on money expected to be settled or not. There are two viewpoints in this regard:  

Second: Zakah is due on the lender following the lapse of a year after he receives the debt if the borrower is insolvent or used to procrastinate.

After the Academy surveyed the different studies submitted about "Zakah on buildings and non-arable leased land" and after detailed discussion on the subject, the following has been decided:

• There is no Qur'anic verse or a Prophet's Hadith which points that Zakah is due on buildings and non-arable leased land.
   

• There is no Qur'anic verse or a Prophet's Hadith which points that Zakah is immediately due on the revenues of buildings and non-arable leased land.
  Therefore, the Academy decides the following:

Second: Zakah is due on their revenues following the lapse of a year after receipt. The rest of Zakah payment conditions should be taken into consideration.

On perusing research written about Zakah on company shares, the Council of the Academy decided the following:

First: Zakah is obligatory on company shares. The company should pay Zakah on behalf of the shareholders if the company bylaws so stipulate; if its general assembly issued a decree to this effect, the company is legally obliged to pay Zakah or if the shareholder authorized the company to pay such Zakah.

Second: The company administration should pay Zakah on shares just like an individual person pays Zakah on his own money. This means that the company will consider the money of all shareholders as the money possessed by a single person. Zakah will be paid accordingly, taking into consideration the criteria of Zakah payment such as the allotted Nisab, the amount to be paid, type of funds as well as any other conditions related to the payment of Zakah. The shares on which Zakah is not due are public treasury shares, charitable endowment shares, charitable authority shares and non-Muslim-owned shares.

Third: If the company did not pay Zakah for one reason or another, the shareholder must pay Zakah on his held shares. If he managed to examine the accounts of the company and know the amount of Zakah due on his shares, supposing that the company would pay Zakah in the same manner mentioned above, he would have to pay Zakah on this basis. If he does not have knowledge of the company accounts and is a shareholder of the company with the aim of making use of the annual revenue from the shares, he will pay Zakah on his shares as if they were invested items.
According to the decree of the Islamic Jurisprudence Academy in its second session regarding Zakah on buildings and non-arable leased land, the shareholder will pay Zakah on the revenues of his shares and not on the value of the shares themselves. The amount payable is a quarter of the tithe after the lapse of a year in which the shareholder receives revenue from his shares. If the shareholder purchases such shares with the purpose of entering into commercial transactions, he would pay Zakah on them as if they were commercial goods. If a year lapsed with such shares in his possession, he would pay Zakah on their market value. If he can not ascertain the market value, he will pay Zakah on the value of the shares as estimated by experienced people. He has to pay a quarter of the tithe of their value as well as on the profit, if these shares made a profit.

Fourth: If a shareholder sold his shares during the year, he would add their sale price to his money and pay Zakah on both when a year lapses. The buyer will pay Zakah on the shares in the same manner mentioned above.

On perusing the researches submitted on "Investing Zakah money in profitable projects while the deserving person does not possess them" and listening to the opinions of experts and members, the following has been decided:

It is permissible to invest Zakah money in profitable projects possessed by Zakah deserving recipients. These projects may be supervised by the legal authority in charge of levying and distributing Zakah, provided that the dire needs of Zakah recipients are fulfilled and there are sufficient guarantees that there will be no losses.

After perusing the memo submitted to the third session of the Academy regarding giving Zakah to the Islamic Solidarity Fund, the following points are recommended:

According to the Resolutions issued by the Second Islamic Summit Conference which call for establishing this Fund and financing it by the state members, and as long as some countries did not pay their regular voluntary annuity, and as a means of helping the Islamic Solidarity Fund to perform its charitable aim, the Academy calls the Islamic countries and organizations and well-to-do Muslims to support this Fund so that it may assume its role in helping the Islamic nation.

First: It is not permissible to give Zakah to the Islamic Solidarity Fund because this will prevent the original recipients mentioned in the Glorious Qur'an from obtaining their right.

• The conditions of legal authorization should be met whether by the Fund, individuals or organizations.
   

• The Fund should modify its bylaws by adding the amendments which will enable it to carry out such tasks.
   

• The Islamic Fund should allocate a special account for Zakah money so that it will not be mixed with resources spent in other non-Zakah channels such as public conveniences.
   

• The Fund is not allowed to spend Zakah money on administrative fees and employees' salaries which do not belong to Zakah channels.
   

• Those who pay Zakah have the right to determine any of the eight channels for giving out their Zakah money and the Fund should stick to their choice.
   

• The Fund should distribute Zakah money to its recipients as soon as possible within a year as a maximum.