Turkey and QFC 'most Islamic Finance friendly tax systems'

Turkey and the Qatar Financial Centre (QFC) have the most Islamic Finance friendly tax systems out of eight countries in the MENA region, in a study sponsored by Qatar Financial Centre Authority in partnership with the International Tax and Investment Center, based in Washington DC.

The study, Cross border taxation of Islamic finance in the MENA region - Phase One, shows that while simpler Islamic finance transactions can be carried out in some countries without prohibitive tax costs, of the countries reviewed only Turkey and the QFC have a tax system that enables sukuk transactions to be carried out without excessive tax costs.

The study goes on to examine two alternative approaches a country can take to update its tax system to support Islamic finance transactions (referred to in the study as the UK model and the Malaysian model), and concludes by recommending the one that is adopted in Malaysia as being quicker and simpler to implement for Muslim majority countries. The study reviewed the tax treatment of four common Islamic finance structures, commodity murabaha, sukuk, salaam and istisna in eight MENA region countries: Egypt, Jordan, Kuwait, Libya, Oman, Qatar, Saudi Arabia, Turkey, and also in the Qatar Financial Centre.

Read more: http://www.gulfbase.com/news/turkey-and-qfc-most-islamic-finance-friendly-tax-systems-/229144