In media release No 32 issued on 13 October 2010, the Chairman of the Board of Taxation, Dick Warburton AO, announced the release of a discussion paper on the Board's review of the taxation treatment of Islamic finance, banking and insurance products.
The Government announced on 26 April 2010 that the Board of Taxation would undertake a comprehensive review of Australia's tax laws to ensure that, wherever possible, they do not inhibit the expansion of Islamic finance, banking and insurance products.
The Board has been asked to:
- Identify impediments in current Australian tax laws (at the Commonwealth, State and Territory level) to the development and provision of Islamic financial products in Australia;
- Examine the tax policy response to the development of Islamic financial products in other jurisdictions (including the United Kingdom, France, South Korea and relevant Asian jurisdictions); and
- Make recommendations (for Commonwealth tax laws) and findings (for State and Territory tax laws) that will ensure, wherever possible, that Islamic financial products have parity of tax treatment with conventional products.
The Board is planning to conduct consultation meetings in Sydney, Canberra and Melbourne in November 2010. The Board also welcomes submissions on issues raised in the discussion paper. The closing date for submissions is Friday 17 December 2010.