Zakaat on Intercompany Loans

Q: Is zakaat payable on Intercompany Loans? Company X and Y are owned by Mr. A. Company X lends Y R250 000 as demonstrated on the balance sheet. The loan is a general loan with no specific purpose. The loan is an Asset to X and a liability to Y. Will Company X pay Zakaat on the loan receivable from Y? Will Y subtract the loan in its zakaat calculation?

A: Since both companies belong to one individual, the inter company loan will have no effect on the zakaat. Zakaat will be paid on the entire amount of wealth owned by him.

( وسببه ) أي سبب افتراضها ( ملك نصاب حولى ) نسبة للحول لحولانه عليه (الدر المختار 2/259)

الزكاة واجبة في عروض التجارة كائنة ما كانت إذا بلغت قيمتها نصابا من الورق والذهب كذا في الهداية (الفتاوى الهندية 1/179)

Answered by:

Mufti Ebrahim Salejee (Isipingo Beach)

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