Ruling 1812 — The One-Fifth Tax (Khums)

If a person purchases something with the profit earned by him during the year, but the item cannot be considered a necessary or reasonable expense [as per his status] for the year, it is obligatory for him to pay khums on it at the end of the year. In the event that he does not pay khums on it and the value of the property increases, he must pay khums on its current value.