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The Grand-Duchy Grand-Duchy of Luxembourg is historically one of the first European actors in Islamic finance sector since the 1970s. Luxembourg was the first European Stock exchange to list a Sukuk in 2002 and currently hosts more than 40 regulated Shariaa-compliant investment funds and sub funds. The Luxembourg direct and indirect tax authorities have already issued two circulars [i] strengthening the substance over form approach in order to ensure an equal treatment of Islamic finance products compared to conventional products. The Luxembourg direct tax authorities have notably recognized that Sukuk have to be considered as debt instruments from a tax perspective. Consequently, the tax treatment applicable to yield on Sukuk will be the same than for conventional Interest on...
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