In a move which further emphasises 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 has today (30 July 2019) published a Statement of Practice, which confirms the tax free status of typical Sharia compliant funding structures. The Statement of Practice confirms 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, 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.”