Islamic finance in Europe (76)

Continuation

In recent years, the French regulatory authorities have taken a number of steps to encourage Islamic finance in the country.

The first initiative was announced in July 2008.

That initiative involved significant:

-      tax

-      and regulatory

changes aimed at boosting Islamic finance in France.

More specifically, these changes were related to:

-      the admission to listing of sukuk on a French regulated market;

-      the tax treatment of Islamic financial transactions;

-      and, to a lesser extent, reforms of the fiducie (French trust).

Under these changes, compensation paid by sukuk issuers is, for tax purposes, treated just like the interest on a traditional bond offering and is deductible from taxable income.

From the research paper of European Central Bank

(Authors: F.Mauro, P.Caristi, S.Couderc, A.D.Maria, L.Ho, B.K.Grewal, S.Masciantonio, S. Ongena and S.Zaher)