Shaikh Bin Baz (may Allah have mercy upon him) was asked:

Question:

“Please speak to us about Zakat on stocks. How do you give Zakat on it? Is Zakat given on the profit along with the principle wealth or the profit alone and the principle wealth alone? Is it obligatory to give Zakat when it is registered or at beginning of the year? Jazakallahu Khairan

Answer:

“Stock companies needs some detail. If the stocks are for selling and he wants a profit, then Zakat must be paid on these after a year. Whenever a year passes, the value of the stocks is determined, whether from land, cars, buildings, or other than that. Whenever a year passes on the principle wealth which is in the stocks, Zakat is paid after knowing the value of the land, the cars, these buildings, and what resembles that. Zakat is given along with its profit. If the stocks were bought for 10 000 and a year passes and it becomes equal to 20 000, he gives 20 000 in Zakat. The opposite likewise. If he bought it for 10 000, however after one year it decreases to 8 000 or 7 000, then he gives a decreased amount of Zakat. So the lesson is in giving Zakat on what is bought, that is, the stock when a complete year passes. As for if the stock is not for selling and only for growth, like he has stocks in a land to build houses and lease it and he does not want to sell it, yet they want the land to build it and make houses for themselves or lease it, then there is no Zakat on it. Zakat is only if he earns wages for them. If wages are earned for them and a year passes, Zakat is given on the wages. As for the land, then there is no Zakat on it. Likewise, if the stocks are in buildings and are not intended to sell it, but they only take the stocks to lease, then there is Zakat on the rent if a year passes. Likewise for cars. If they have stocks in cars to use as taxis or to rent them in a specific case for those who use them, then Zakat is on the rent earned if a year passes” End translation.” End translation. [Reference]

Shaikh Salih al-Fawzan (may Allah preserve him) said,

“If it is stocks which are bought and sold and profit is sought, then these are business goods. If a year passes on them, he pays Zakat by estimating what they are valued and pays the Zakat. If he earns from it profit, he pays Zakat. He pays Zakat on the principle wealth and the profit because the profit follows the principle wealth” End translation. [Reference]

You can also find more fatwas here and here.

And Allah Knows Best

Translated by

Faisal Ibn Abdul Qaadir Ibn Hassan
Abu Sulaymaan