PwC Islamic Finance blog

Brazilian interest in Islamic finance

As an illustration of how interest in Islamic finance is spreading around the world, I was recently asked to speak on the subject in Sao Paulo, Brazil, at a conference organised by the Brazilian securities regulator, the CVM, and hosted by the Brazilian stock exchange BM&FBOVESPA.

My session was a triple act, shared with Alvaro Taiar, a tax partner from PwC Brazil who specialises in the taxation of financial services, and Lewis Cohen, a lawyer from Clifford Chance’s New York office. For each structure, Lewis gave an outline and covered the legal issues, I explained how those structures are treated for UK tax purposes, and Alvaro addressed the Brazilian tax and accounting issues. Although none of us had previously met, some conference calls to prepare meant that this approach worked very well and the audience seemed to appreciate it.

How should general takaful be taxed in the UK?

A few months ago, along with some colleagues who also specialise in the taxation of insurance companies and takaful, I spent some time thinking about whether general takaful would qualify as mutual business in the UK.

Technical background

In the insurance industry, the description ‘life insurance’ refers to insurance contracts that involve human mortality, and ‘general insurance’ refers to all other insurance contracts. Similarly, ‘general takaful’ is used to refer to contracts covering the same subject matter as would be covered by general insurance. The phrase ‘life takaful’ is somewhat less common, and is often replaced by ‘family takaful’ where conventional insurers would refer to life insurance.

Recorded presentation on the UK approach to the taxation of Islamic finance

John Masters is a tax partner at PricewaterhouseCoopers Australia who leads our Islamic finance practice there. Last month, he organised an all day meeting in Kuala Lumpur to discuss the taxation of Islamic finance, attended by specialists from a number of PwC firms in Asia, and hosted by our global Islamic finance leader Faiz Azmi of PwC Malaysia.

My diary precluded me attending. However, I sent a short PowerPoint presentation along with a 24 minute sound recording, explaining how the UK has changed its tax laws to facilitate Islamic finance. I have attached the sound recording below for readers to either listen to at their computer or to download to an MP3 player.