Abstract
Abstract : The awareness of and access to Islamic financing has increased significantly over the last few years in South Africa, and globally. Due to this increase, the need for tax legislation regarding Islamic financing was essential. Therefore, such tax legislation was introduced in most countries across the world, including South Africa and Malaysia. The purpose of this study is to provide an overview of the Islamic financial products that are available in South Africa and Malaysia, and the tax consequences for these products. Furthermore, this study attempts to provide a comparative analysis of the tax treatment in South Africa and Malaysia. This study will adopt doctrinal methodology as it attempts to investigate the tax laws of both countries. The information will be sourced from documents in the public domain and analysed using a qualitative research approach. This study revealed that the tax implications of Islamic financing in South Africa and in Malaysia were developed to achieve tax neutrality for taxpayers utilising Islamic financing as opposed to taxpayers utilising conventional financing. The treatment in both states ensures that those Islamic financed taxpayers are not disadvantaged in any way. However, Malaysia offers many tax incentives to Islamic financed users, while South Africa does not. These incentives benefit the taxpayers using Islamic finance products in Malaysia and therefore attract more users and foreign investors. This dissertation aims to clarify the tax implications of an Islamic finance loan, and to provide an informative comparison of these implications between South Africa and Malaysia.
M.Com. (International Taxation)