UK - EDUCATION - UK Approach to Taxation in Islamic Finance | Mr Mohammad Amin, Tax Partner, PricewaterhouseCoopers

Institute of Islamic Banking and Insurance (IIBI) is a non-profit organisation that exists to create a wider base of knowledge and understanding of the Islamic financial system and to help the exchange of information between the Islamic and other financial systems through education, workshops, discussions, research and publications directed also towards raising public awareness of the consequences of financial dealings devoid of moral and ethical principles. To find out more about IIBI, visit our website.

http://www.islamic-banking.com
http://www.newhorizon.islamicbanking.com

IRELAND - New measures aim to make Irish finance industry more attractive

www.irishtimes.com - IFSC: THE GOVERNMENT has introduced a package of 21 measures in the Finance Bill to help improve the attractiveness and competitiveness of the international financial services industry.

The Minister for Finance Michael Noonan has said that any one of the measures on their own would not have a major effect but taken together they would help improve the industry in Ireland.

He described the measures as “small, nuancing adjustments” to the attractiveness of the financial services industry package.  (source)

IRELAND - The stranger bits of Finance Bill 2012: from cricket to Islamic finance

thejournal.ie - THE FINANCE BILL 2012 was published yesterday by Minister for Finance Michael Noonan and among the Mortgage Interest Relief measures and tax changes for businesses, the Bill also clarified the following (more unusual) elements of Irish taxation:
...3. Islamic Finance
The Finance Bill also includes enhancements to the tax regime for Islamic finance.
This area of finance in Ireland, which although faith-based is not limited to Muslims, was introduced in the Finance Act 2010, and refers to financial transactions which are consistent with the principles of Islamic or Sharia law.  (source)

For the Finance Bill click here

FRANCE - PUBLICATIONS - Issuing and Listing Sukuk in France - How to Take Advantage of the Attractive French Legal and Tax Environment

download here

LUXEMBOURG - Luxembourg, a significant hub for Islamic finance

Although the Grand Duchy of Luxembourg is a very small country in terms of area and population (2,586 km2 and 502,000 inhabitants), it is one of the most important financial centers all over Europe. Nowadays, Luxembourg is considered to be the first European financial centre and globally the second after the United States of America in terms of fund industry. Furthermore, Luxembourg is recognized as one of the leading Islamic financial centers through its history in the field of Islamic finance and its continuous efforts to develop this sector.  (source)

IRELAND - Ireland aims to be home of Islamic finance in Europe

Sharia-compliant financial regulations will make Dublin 'centre of excellence for Islamic finances'

 

Ireland has launched a bid to become the home of Islamic finance in Europe as it seeks to rebuild its once dominant financial services sector.

The taoiseach, Enda Kenny, who was swept to power on a wave of public anger at the taxpayers' €70bn (£62bn) bailout of failed banks, told the Irish Funds Industry Association (IFIA) that he was doing everything he could to "ensure" Dublin became "a centre of excellence for Islamic finances". (source)

UK - UK plugs tax loopholes for Islamic mortgages

By MUSHTAK PARKER | ARAB NEWS

Published: Apr 3, 2011 22:53 Updated: Apr 3, 2011 22:53 

The UK Treasury is fast-tracking a number of laws in the Finance Bill 2011 to plug several tax avoidance loopholes including those related to high-end stamp duty land tax (SDLT) in commercial property transactions — both conventional and alternative (Islamic) real estate transactions. 

The loophole includes the use of offshore vehicles to avoid paying full stamp duty tax on property transactions, normally in excess of 500,000 pounds up to a few millions of pounds.(full story)

FRANCE - ISLAMIC FINANCE - most prominent mover 2010

Going over part of the archives, it became clear that France has been the most prominent mover during the year 2010 in the field of Islamic finance.  The review covers the span of the blog.

In July 2010 (just before the initiation of the blog), Norton Rose and DTZ Asset Management did publish the White Paper / Livre Blanc "Finance Islamique et Immobilier en France - comprendre pour agir" (French only) and this after DTZ AM had assisted between 2003-2008 with in all more than 40 transactions for more than 3 billion EURO.

Then there was intense focus on regulatory issues.

1. the French Sukuk-tax regulation published back in August, 2010 : "La présente instruction a pour objet de préciser le régime fiscal applicable à l’un des principaux outils de la finance islamique : les sukuk d’investissement et autres instruments financiers assimilés.
Les sukuk d’investissement sont ici des titres financiers hybrides négociables dont, comme pour les produits financiers assimilés, la rémunération et, le cas échéant, le capital, sont indexés sur la performance d’un ou plusieurs actifs sous-jacents détenus directement ou indirectement par l’émetteur";

2. the French Murabaha/Tawarruq-tax regulation of the same date : "La présente instruction a pour objet de préciser le régime fiscal applicable à un des principaux outils de la finance islamique : l’opération de murabaha avec ordre d’achat, à laquelle s’ajoutent les opérations de tawarruq (opérations de financement réalisées au travers d’une opération de murabaha) et de dépôt rémunéré par une opération de murabaha.
La murabaha avec ordre d’achat est ici un contrat de financement aux termes duquel un client demande explicitement à un Financier de financer l’achat d’un actif déterminé ou d’un portefeuille d’actifs déterminés, en réalisant en particulier deux transferts successifs de propriété se présentant de la manière suivante : un vendeur vend l’actif à un Financier qui le revend à un Client moyennant un prix payable à tempérament, supérieur au prix d’acquisition à hauteur d’un Profit";

3. the French Ijara-tax regulation of the same date : "La présente instruction a pour objet de préciser le régime fiscal applicable à l’un des principaux outils de la finance islamique : le contrat d’ijara sur actif.
L’ijara considéré ici est un contrat aux termes duquel une entité met un bien à disposition d’un client pendant une durée déterminée, en contrepartie du versement de loyers. Ce contrat peut être assorti d’une promesse de vente ou d’une option d’achat"; and

4.the French Istisna-tax regulation of the same date : "La présente instruction a pour objet de préciser le régime fiscal applicable à l’un des principaux outils de la finance islamique : le contrat d’istisna.
L’istisna est un contrat de financement par lequel un Financier, finance pour son compte propre ou pour le compte de son Client, la construction d’un ouvrage mobilier ou immobilier auprès d’un tiers qui le construit (« le Fabricant »). Le Financier paie le Fabricant au comptant ou avec un échéancier durant la phase de construction."

As an interesting follow up on the Norton Rose / DTZ AM publication, there was the article in November 2010 of Wharton "Finding a Home for Islamic Finance in France : arabic" that not only gave a resume of the French position up to that time, but also placed the apparent tension between France and the UK in its' historical perspective from the 1980's onwards (original post) .

An MOU with Malaysian INCEIF aimed at the development for education in the field was entered into in October 2010 and the Guide and Position on the Issuance of Sukuk from the French Financial Markets Authority AMF was published in November 2010. (the English version can be dowloaded HERE).  In December 2010, the AAOIFI approved the "model" for French sukuk, which first French Sukuk in turn is supposed to be issued early 2011.

BNP Paribas was nominated the "Best Islamic Bank - France"by the IFN Islamic Finance News Poll 2010.

The perhaps most remarked academic contribution was "Diversification bancaire, performance, éthique : Alternative ou complémentarité ? Cas des banques islamiques." by Dr. Mohamed Ali CHATTI.

Stumbling upon these texts whilst reviewing part of the archive, I thought it was worthwhile to remind you.

For more details just click "FRANCE" in the country-list of the blog.

Hereunder is a short list of the most relevant tax regulations that changed in France in 2010 (original post) :

MALTA - EVENTS - EGYPT - Seminar on Islamic Finance in Malta

“Malta can become the Bahrain in the Mediterranean by attracting Islamic Finance to its shores.” This statement was made by Mr. Reuben Buttigieg, Managing Director of Erremme Business Advisors and Chairperson of the Malta Institute of Management Training and Education Division, during a half-day seminar on Islamic Finance in Malta, organised on Wednesday 8^th December 2010 by the Embassy of Malta in Cairo in collaboration with Erremme Business Advisors.

IRELAND - Guidance notes on the tax treatment of Islamic financial transactions

Find the "Guidance notes on the tax treatment of Islamic financial transactions" here .

PwC Ireland did publish the Islamic Finance Tax Alert - November 2010.  Find that here.

IRELAND - TAX - Ireland presses on with Islamic finance tax neutrality laws

By MUSHTAK PARKER | ARAB NEWS Published Nov 21, 2010 23:19 Nov 21, 2010 23:19

LONDON: The Irish banking system may be beleaguered and awaiting an imminent bail out from the eurozone countries through the European Central Bank, but the Irish Revenue and Customs is pressing ahead with its tax neutrality regime to facilitate the introduction of Islamic financial transactions in the country.