Eliminating income tax barriers to inbound Islamic investment into Australia.
01 Jun 08 |
BULLETIN FOR INTERNATIONAL TAXATION
Issue: Vol 62 No 6 2008
The increase in the revenues of Arab nations arising from the surge in world oil prices and the withdrawal of Arab investment from the United States present an opportunity for Australia to increase its share of Arab investment. But Islamic investors are expected to invest only in financial products and structures that comply with shariah law, which prohibits returns in the nature of interest. This article examines the implications of shariah law for inbound Arab investment into Australia, observing that shariah-compliant investment generally utilises various legal structures designed to ensure that the return to the investor cannot be characterised as interest. Australia's legal system can accommodate such structures, but the tax implications for non-resident Arab investors using these structures may not be favourable. This article explores whether Australia's income tax laws should be amended to facilitate greater Arab investment into the country.
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Justin ia an Associate Professor, Law School, James Cook University, Cairns, Australia; Adjunct research fellow in Business Law and Taxation, Faculty of Business and Economics, Monash University, Australia.
- Current at
01 April 2016