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Fatawaa


Subject : Money Invested in Currency Exchange is Liable for Zakah

Fatwa Number : 3127

Date : 30-09-2015

Classified : Zakat on Trades

Fatwa Type : Search Fatawaa


Question :

Is the person who invests his money in currency exchange obliged to pay Zakah?



The Answer :

All perfect praise be to Allah, The Lord of The Worlds; and may His blessings and peace be upon our Prophet Mohammad and upon all his family and companions.


Currency exchange business takes the same rulings of articles of merchandise as it is considered money set for buying and selling in order to make profit; therefore, once this money reaches Nissab (the minimum amount liable for Zakah) and one full lunar year passes over possessing it, then paying its Zakah becomes obligatory.


Muslim jurists have disagreed regarding the Zakah due on money-changers. Is it possible that not having that money in their possession for a full lunar year could be a reason for freeing them from the obligation of paying the Zakah due on it?


The Shafite jurists are of the view that money-changers aren`t obliged to pay Zakah because the money doesn`t remain in their possession for a full lunar year, as stated by Imam Ar-Ramli, "If he sold a currency for another as a commercial transaction, such as the case with money-changers, then the lunar year is continued whenever the exchange transaction is concluded. Therefore, Ibn Suraijj said,: Pass the good news to money changers: no Zakah is due on them." {Nihayat Al-Mohtajj 3/65}.


However, the majority of the Muslim scholars including the Hanafites and the Hanbalites are of the view that Zakah is due on the money used for commercial purposes; therefore, money-changers are obliged to pay Zakah because the lunar year continues regardless of currency (Dollar. Dinar…..etc.) being exchanged.


Finally, we adopt the view of the majority of the Muslim scholars in order to be on the safe side and because it is more useful to the poor.







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