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March 16, 2021 | 4 years ago

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Islamic financing: New tax advantages in the next finance law

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Speaking during a parliamentary day at the Council of the Nation on Islamic finance, Mr. Benabderrahmane specified that "after consultation between the ministries of Finance and Religious Affairs and Wakfs and the High Islamic Council (HCA), he The introduction in the next Finance Law of measures aimed at preserving tax fairness has been proposed, given that banking products governed by the precepts of Sharia are similar to conventional transactions ".


For the minister, this will make it possible to subject the products of Islamic finance to the same tax regime and therefore subject the profit margin resulting from these products to value added tax only (VAT), which will also be taken into account to define the result. tax subject to corporate income tax (IBS).


It is also a matter of subjecting investment securities, commonly known as "Sukuk", to the same tax regime applied to securities, and of extending the tax provisions relating to registration fees to Islamic products, he added. .


Under the same tax advantages intended for Islamic finance, it was also proposed "the realization of the tax deduction for the reserves used for the calculation of the profits as well as the risks of investment in the remuneration of the deposits of Islamic investment and the extension of the tax advantages granted under the Investment Promotion Law to banks, which market the product of Islamic finance, known as "Ijara".


The minister also mentioned the proposal for a possible exemption of income from these banking products through their exclusion from the calculation of the tax result submitted to the IBS, in addition to the integration of Islamic financing into the legal framework relating to the support of the financing of new housing and the extension of procedures related to the reduction of the cost of borrowing to products of Islamic finance, in particular aid granted to the sectors of agriculture and industry.


March 16, 2021 | algeria-logo

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