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ARTICLE · 11 NOVEMBER 2010

Islamic Banking: Challenges and Opportunities in Australia

Moore Australia
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On 13 October 2010, the Board of Taxation (the "BOT") released a discussion paper entitled "Review of the Taxation Treatment of Islamic Finance". The discussion paper was released subsequent to the Government’s request for a review ‘in order to ensure that Islamic financial products have parity with conventional products, having regard to their economic substance’.

AustraliaFinance and Banking
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Authors: Ai Mee Ching and Simon Tucker, Moore Stephens Melbourne

On 13 October 2010, the Board of Taxation (the "BOT") released a discussion paper entitled "Review of the Taxation Treatment of Islamic Finance". The discussion paper was released subsequent to the Government's request for a review 'in order to ensure that Islamic financial products have parity with conventional products, having regard to their economic substance'.

Islamic finance refers to banking and financial products or arrangements that are compliant with the principles of Shariah law. One of the major differences between Western and Islamic finance systems is the notion of interest (i.e. charging for the use of borrowed money), which prohibited under the principles of Shariah law. Other prohibitions include financing of industries deemed unlawful by Shariah law such as weapons, pork and gambling.

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