TFSA and KPMG Collaborate on Islamic Finance in Canada
The TFSA developed an Islamic Finance Working Group that published a report a while back on the Islamic Financial opportunities and challenges in Canada.
Some of the issues included are:
- The treatment of profit in a Murabaha transaction
- The treatment of double sale transactions where assets exchange hands generating GST and other taxes every time a sale is executed. Ideally for such transactions where assets exchange hands as part of a single deal, tax adjustments should be made in order to treat it all a single transaction.
- In Diminishing Musharaka (declining partnership) transactions when the financier is an equity partner in the asset, compliance obligations and costs can potentially make the product uncompetitive.
Syndicate
