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Extension of Islamic banking in Azerbaijan to require taxation changes

Business Materials 30 November 2011 20:08 (UTC +04:00)

Azerbaijan, Baku, November 30 /Trend, I. Khalilova /

The launch of the second phase of a project envisioning creation of a specialized Islamic banking structure at the International Bank of Azerbaijan (IBA) is scheduled for 2012, Behnam Gurbanzadeh, Head of the IBA Group responsible for Islamic banking launch, told Trend on Wednesday.

"The works will begin straight after positive reply to the first-phase works is obtained as the first phase has specified a list of Islamic products and services the IBA will be able to provide without changing the existing legal provisions.

In the project's implementation, the IBA is assisted by a consortium of Salans, KPMG, Pinsent Masons, and Dar al Shariah, which plans to submit a primary report on the provision of Islamic banking products and services for consideration to the IBA management next week.

In the world, there have been established special order of taxation of Islamic financial instruments; forms and methods of state regulation and control of Islamic banks; order of issue and circulation of Islamic securities; and requirements to Islamic investment funds.

The IBA has been providing Islamic banking services since 2003 when it pioneered this field on the country's bank market. The IBA provided services in this field at the price of money borrowed from the Islamic Bank for Development (IBD) and has so far assigned up to $10 million.

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