Tax laws set for Islamic bonds

July 19, 2013

The Inland Revenue and Stamp Duty Legislation (Alternative Bond Schemes) (Amendment) Ordinance 2013 was gazetted and came into operation today.
 
It amends the Inland Revenue Ordinance and Stamp Duty Ordinance to provide a taxation framework for Islamic bonds, or sukuk, promoting the development of a market for these bonds in Hong Kong.
 
Secretary for Financial Services & the Treasury Prof KC Chan said the amendment ordinance represents the joint efforts of the Government and the market to remove impediments to developing a sukuk market in Hong Kong.
 
"This will help establish a conducive platform for the development of Islamic finance in Hong Kong, thereby diversifying the types of products and services available to our financial markets, and consolidating Hong Kong's status as an international financial centre and asset management centre," he said.
 
The new tax measures will apply to qualified sukuk issued from today.
 
The Inland Revenue Department will soon publish the Departmental Interpretation and Practice Notes and Stamp Office Interpretation and Practice Notes to provide guidance on its implementation.