Article 68 - Funding Costs of Islamic Financial Institutions

(1) In computing Chargeable Profits or tax losses for an Accounting Period, an Islamic Financial Institution is entitled to a deduction for the equivalent funding amount.
(2) The "equivalent funding amount" for an Accounting Period is the deduction for funding costs that would be allowable under Part 4 for that Accounting Period if the Islamic Financial Institution were a Conventional Financial Institution funding its operations using Conventional Finance Transactions, less the actual funding amount.
(3) The "actual funding amount" for an Accounting Period is the deduction for funding costs actually allowable for that Accounting Period under Part 4.
(4) "Funding costs" means the cost of servicing debt obligations, excluding capital repayments.
(5) The transfer pricing provisions of Part 8 apply to the calculation of the equivalent funding amount in Article 68(2).
Amended (as from 18th June 2014)