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Saturday, 8 September 2007

Better Tax Treatment For Takaful Players in Malaysia

KUALA LUMPUR, Sept 7 (Bernama) -- Takaful companies will see improved tax treatment from next year under the 2008 Budget tabled in Parliament today by Prime Minister Datuk Seri Abdullah Ahmad Badawi.One will be that the management expenses borne from the shareholders' fund will be allowed as deductions from the gross income of the fund.Another is that the share of profits distributed from the family Takaful fund and general Takaful fund are allowed as tax deduction.Also, the share of profits distributed to the participants in relation to the investment income will be taxed on the participants through a final withholding tax mechanism.Fourthly, the Wakalah fee received by the shareholder from the family Takaful fund and general Takaful fund will be taxed.The final measure is allowing a deduction for Qard (interest-free loan) from the shareholders' fund and imposing tax on the repayment of Qard.Abdullah pointed out that at present, the tax treatment for Takaful business is the same as that for the conventional insurance business, without any specific tax treatment.
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Alfalah Consulting - KL: www.alfalahconsulting.com 
Islamic finance consultant: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

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