A seminar was recently held in Doha, Qatar in which a group of experts examined the taxation of Sharia'ah-compliant financial products.
The seminar was backed by the Gulf Cooperation Council (GCC) branch of the International Fiscal Association. The topics discussed at the event included the Qatar Financial Center Authority's (QFCA) research project on the taxation of Islamic transactions.
Mohammed Desin, a partner at Ernst & Young, stated during the seminar that "Islamic finance is effectively the sharing of risk and reward and not ignoring the economics of the transaction. We say: 'We are partners with you.' The intention of the parties doing the transaction is critical."
The main speaker at the seminar, Islamic finance consultant Mohammed Amin, spoke about the QFCA-sponsored research he conducted earlier this year on the cross-border taxation of Islamic financial transactions in the Middle East and North Africa. The purpose of the research was to come up with tax policies for countries that wish to make their tax regimes more inclusive of Islamic finance.
Mr Amin highlighted the fact that "There's very little legislation for Islamic finance. Countries are at very different stages of development. For example, of the countries which responded to our study enquiries, only Turkey and the Qatar Financial Center have specific rules for Sukuk (Islamic bonds)."
The seminar was attended by tax experts from various GCC states, as well as lawyers, accountants, bankers and Ministry of Finance representatives. It was chaired by Ian Anderson, the CFO and director of the tax department of QFCA.
Mr Anderson commented: "Islamic finance is growing rapidly in many parts of the world, not least in the Gulf. Improving the understanding of taxation of Islamic finance is therefore increasingly important – and our seminar took significant steps in that direction...We will continue to support research and encourage debate to help advance knowledge in this area."