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Working in a large firm as an Islamic finance tax advisor

Being an Islamic finance tax advisor requires expert tax knowledge. Knowledge of key other areas is also required, as well as good "soft skills." My article for "IFN Education."

Summary

22 January 2016

The magazine "Islamic Finance News" has a supplement, "IFN Education." I was asked to supply an article for the January 2016 issue on what my job entailed and the skill requirements.

While the magazine is only available to subscribers, I have reproduced my own article below.

Working in a large firm as an Islamic finance tax advisor

This article takes a look at the roles an Islamic finance tax advisor takes on in a large firm, based on the experience of MOHAMMED AMIN, who prior to retirement was a tax partner in PwC, their UK head of Islamic finance, and a member of PwC’s four-person Global Islamic Finance Leadership Team.

What the position entails

All commercial transactions involve potential tax costs. Some tax costs are avoidable; some are not. The tax issues become even more complex when transactions cross international borders. The role involves advising, for example:

The skills required

The key requirement is expert knowledge of your country’s tax law governing domestic and cross-border transactions.

You also need to be familiar with the tax law applicable in relevant overseas countries. However, formally advising on foreign taxes is risky. Instead one needs to collaborate with overseas tax advisers; either within your own international network as with PwC, or with other overseas advisers.

Critically, expert knowledge of tax law is insufficient, by itself, to make a good tax adviser. One needs a great deal of additional knowledge to give meaningful advice to clients, even though in all of the fields mentioned below other advisers will give the final advice that the client relies upon. The reason the tax adviser requires this broader knowledge is that without it they will fail to understand the transaction properly or may end up proposing tax solutions which fail for non-tax reasons.

Some of the key additional areas where the tax adviser requires expert additional knowledge are:

As well as the “hard” technical skills mentioned above, to practice as a senior tax adviser requires a number of “soft” skills. These include:

Acquiring the skills required

Many of the “soft” skills mentioned above will be acquired through on-the-job experience. However most large firms, like PwC, invest significantly in providing formal “soft” skills training for their staff and partners.

How to acquire the “hard” technical skills mentioned above varies from country to country. This article sets out the UK position as an illustration for those resident elsewhere.

Many UK universities offer courses in tax law. However, these are academic and are not designed to equip their students for immediate professional practice upon graduation. Instead becoming a competent tax adviser requires an appropriate professional qualification. Obtaining this entails both passing examinations and demonstrating relevant practical experience.

The pre-eminent professional body in the UK in the field of taxation is the Chartered Institute of Taxation (CIOT). The author became an Associate in 1978 (by passing the examinations and demonstrating the experience) and a Fellow in 1999 by submitting a thesis. The CIOT has recently developed the Advanced Diploma in International Taxation as a specialised global tax qualification.

Accounting skills are best acquired by joining a professional body of accountants. The pre-eminent one in the UK is the Institute of Chartered Accountants in England and Wales which the author joined in 1977.

Treasury management skills can be acquired by joining the Association of Corporate Treasurers. The author joined this body in 1995.

Several UK professional bodies offer qualifications teaching the Shariah rules governing Islamic finance. While the author often lectured for them, he considered that the qualifications concerned were “too junior” for him to take.

 

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