In a move demonstrating that Jersey is open for business for Sharia investment and financing structures, the tax authorities in Jersey have issued a Statement of Practice providing tax certainty for typical Sharia-compliant financing structures.
Revenue Jersey's Statement of Practice confirms the tax-free status of typical Sharia-compliant funding structures. It also highlights that financing structures materially in the form of an illustrative Tawwarruq/Murabaha structure will not be within the scope of Article 123D(4)(e) of the Income Tax (Jersey) Law and, accordingly, will be non-taxable.
The Statement of Practice is available here.
Bedell Cristin Partner Martin Paul (pictured), who was at the forefront of discussions between industry, Jersey Finance and Revenue Jersey, commented: "This is a useful step, confirming without doubt that typical Sharia financing structures work effectively in Jersey.
"It is further evidence of Jersey's determination to remain a leading centre for Sharia-compliant international investment."