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Qld Tax Symposium 2011

Qld Tax Symposium 2011. Islamic Finance: Australia reacts belatedly. And impetuously? Associate Professor Justin Dabner Law School, James Cook University, Cairns, Australia. Body text. Islamic Finance: Australia reacts belatedly. And impetuously?. Introduction The growth of Islamic Finance

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Qld Tax Symposium 2011

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  1. Qld Tax Symposium 2011 Islamic Finance: Australia reacts belatedly. And impetuously? Associate Professor Justin Dabner Law School, James Cook University, Cairns, Australia

  2. Body text

  3. Islamic Finance: Australia reacts belatedly. And impetuously? • Introduction • The growth of Islamic Finance • The Shariah • The prohibitions • The structures • The tax implications • The opportunity • The Australian response

  4. The Shariah and finance structures • Murabaha (cost plus) • Mudharabah (profit sharing limited partnership) • Ijara wa-igtina (lease-purchase) • Musharakah (joint venture) and sukuk (securitization)

  5. Tax implications of Islamic finance • Stamp duty • GST/VAT • CGT • Income tax

  6. Responses by other countries • Malaysia • Positive discrimination • United Kingdom • No special favours

  7. Islamic finance in Australia • Australian tax implications of Islamic finance •  Inward Islamic foreign investment •  Developments in Australia • 2004 Victorian stamp duty amendments • 2009 Financial Centre Forum report • 2010 Australian Trade Commission report • 2010 Board of Taxation Discussion paper

  8. Critique of the Australian response: threshold questions • In substance interest or in lieu of interest? • Should Australia cater for Islamic finance? • The Islamic interest / The national interest • Are reforms benefitting one religious group permissible? • Should artificial / complex financial arrangements be endorsed?

  9. Critique of the Australian response: threshold questions (cont’d) • Are tax concessions a desirable policy tool? • Acceptability of tax integrity risks? • How significant is Islamic finance? • Is tax important to Islamic financiers? • `Level playing field`concession or global finance centre?

  10. What reforms might be adopted? • Stamp duty? • GST? • Income tax? • Finance sector incentives?

  11. Conclusion • Reform process failure?

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