About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

20 Deakin L. Rev. 263 (2015)
Taxation Treatment of Islamic Finance Products in Australia

handle is hein.journals/deakin20 and id is 271 raw text is: TAXATION TREATMENT OF ISLAMIC FINANCE PRODUCTS IN AUSTRALIA MARIA BHATTI In October 2010, the Board of Taxation released a Discussion Paper titled Review of the Taxation Treatment of Islamic Finance. Since the release of this Discussion Paper, there has been no legislative reform in Australia to accommodate Islamic finance products. In the Discussion Paper, the Board reviews the taxation treatment of Islamic finance products, such as murdbaha. Murabaha is known as 'cost plus profit financing' and involves the sale of a commodity by a financial intermediary to a purchaser at a cost plus mark-up profit rate. The Board argues that in order for a mur5baha product to be treated equally to a conventional product for Australian taxation purposes, the profit mark-up component common to murabaha transactions must be treated as if it were interest. However, the Board does not consider the implications for Mvuslims if the muribaha profit mark-up is treated as interest. The objective of this article is to investigate the following two questions: can mur5baha be viewed as Shari'a-compliant by Muslims if mark-up is treated as if it were interest; and, if mur~baha is viewed by Muslims as no longer Shar~a-compliant, could this cause Australia to become less attractive for Muslim investors? This article will undertake a comparative analysis by examining the implications of treating murabaha mark-up as if it were interest from various Australian and UK perspectives. This article argues that before legislative amendments are introduced to cater for Islamic finance products, further research is needed on the Shart'a- compliant nature of Islamic finance products such as murdbaha. * BA/LLB (Melbourne), LLM (Melbourne), PhD Candidate, Law School, Monash University. This article is part of the author's LLM thesis and the author would like to thank her supervisors Professor Tim Lindsey and Dr Sunita Jogarajan for their assistance and guidance in the research. The author is also grateful for the editors and anonymous reviewers of the Deakin Law Review and the author's previous employer, Leanne Abela of Pearsons Lawyers, for providing study leave to enable the author to complete the article and Dr Imran Lum, Associate Director, National Australia Bank, for his constructive feedback on this article.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most