A paper by Mohammed Amin, Price Waterhouse Coopers.
For several decades, Islamic finance has been growing rapidly in the Muslim world, particularly in the Middle East and Malaysia. In view of the importance of the major western financial centres such as London, New York, Frankfurt and Tokyo, Islamic banks headquartered in Islamic countries find that they need to have operations in these western financial centres. More recently, as the Muslim populations of western countries have increased, they have a desire to access Islamic financial services themselves.
Accordingly, both foreign banks from the Muslim world and more recently indigenous Islamic banks find themselves needing to operate within western countries. However, the taxation systems of western countries have developed over centuries in a conventional financial environment and often fail to accommodate the type of transactions undertaken in Islamic finance.
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Via Riyazi Farook.