Firstly, the types and rulings of Zakat differ depending on the type of wealth being subject to Zakat. Zakat on animals is different from Zakat on crops, which are both different from Zakat on stored wealth. Each type of wealth has its own specific rulings and regulations, and it is necessary to understand these in order to determine the applicable Zakat.
Secondly, when it comes to Zakat on a pharmacy, we must differentiate between two matters:
– The first is the trade tools: such as the pharmacy itself, refrigerators, cabinets, desks, and other items that are not sold as they are considered trade tools. These items and their likes are not subject to Zakat, and the owner of the pharmacy does not pay Zakat for them except in certain cases that we will mention later. Generally, trade tools are not liable for Zakat.
– The second matter is the medicines that are intended for sale. These are treated as merchandise, provided they are valid for use and saleable, or guaranteed by the drug company in case of spoilage before sale. If these conditions are met, they are subject to Zakat as follows:
• It is a condition for the Zakat on these medicines to be paid that they have reached the Shariah-prescribed threshold, which is valued as eighty-five grams of gold at 24-carat weight.
• Similarly, it is required that this threshold is reached at the beginning and end of the lunar year according to the Hanafi school of thought, and some scholars have also required the threshold to be maintained throughout the lunar year. If the quantity decreases during the year, the owner of the pharmacy must start a new Zakat year.
• It is also a requirement that the goods and medicines are fully paid for and owned by the owner of the Zakat. If the medicines belong to the drug company and have not been paid for by the pharmacy owner, then the owner of the pharmacy is not liable for Zakat on these merchandise. Rather, the Zakat obligation falls on the drug company.
The value of the medicines is calculated based on the market value at the time of Zakat payment, not the nominal value at which they were purchased. For example, if a medicine was purchased for ten and its price becomes twelve, then Zakat is paid on the twelve.
The calculation is done as follows:
The owner of the pharmacy takes an inventory of all the medicines that he owns and are available for sale. He estimates their market value in the currency and then deducts any debts owed to drug companies that are related to trade. He then pays Zakat at a rate of 2.5% on the remaining value.
The owner of the pharmacy may pay his Zakat in cash, or he may pay it in the form of medicines of the same value that he gives to those who are eligible to receive Zakat, from among the eight categories mentioned in the Quranic verse.
Thirdly, if the owner of the pharmacy does not sell the medicines himself, but rather rents out the pharmacy to someone else, he is not liable for Zakat on merchandise, as he does not own the medicines himself. However, he is liable for another type of Zakat known as “Zakat al-Manafe’ or Zakat al-Mustaghallat” which is the Zakat on the rental income or benefits obtained from the leased property. The scholars have different opinions on how to calculate Zakat on this type of income:
The first opinion, which is the majority opinion of the scholars including the Hanafi school of thought, is that the leased property itself is not subject to Zakat, but only the rental income is subject to Zakat. For example, if someone owns a pharmacy worth 100,000 and rents it out for 10,000, according to this opinion, the 10,000 is added to his other wealth. If the total wealth reaches the Zakat threshold, Zakat is paid at a rate of 2.5%, and he does not have to pay anything on the 100,000 pharmacy price.
The second opinion, which is held by some Hanbali scholars including Imam Ibn Aqeel, is that Zakat is obligatory on both the leased property and the rental income. Applying this opinion to the previous example, the owner of the property would add the value of the pharmacy, which is 100,000, and the rental income, which is 10,000, to his other wealth. He would then pay Zakat at a rate of 2.5% on the total sum.
Those who hold this opinion have based it on the issue of renting women’s gold jewelry, which is not subject to Zakat as long as it is owned for adornment purposes. However, if the jewelry is rented out, Zakat is payable on both the rented item and the rental value.
The third opinion is held by our esteemed scholars, including Mohammad Abuzahra, Sheikh Abdulwahab Khalaf, Sheikh Abdulrahman Hassan, Sheikh Yusuf al-Qaradawi, and it states that leased properties are subject to Zakat similar to agricultural lands because they are not sold themselves, but rather their benefits are utilized. This is similar to the case of agricultural lands. The Zakat value in this case is 10% if we deduct the costs and consumption from the rental value and pay only from the remaining amount, or 5% if we pay only from the rental value without deducting the costs and consumption. For example, if someone rents a property for 10,000, they should pay 5% of the 10,000 if costs and consumption are not deducted, or 10% of the 10,000 after deducting the expenses.
This is the opinion that we choose, and Allah knows best.
Fatwa by Dr. Khālid Naṣr