Product VAT Treatment
🏦 Murabaha (Cost-Plus Sale)
Bank buys asset, sells to customer at markup. Two supplies: bank purchase (input VAT claimable) and sale to customer (standard-rated). Profit element is consideration, not interest — standard-rated, not exempt.
🏠 Ijara (Lease)
Bank purchases asset so leases it. Regular rental payments — standard-rated if commercial. Ijara wa iqtina (lease-to-own) — treated as finance lease. Capital goods scheme applies to high-value assets.
📜 Sukuk (Islamic Bonds)
Issuance of Sukuk — exempt financial supply. Profit distributions — exempt (treated like interest). Trading in Sukuk — exempt. Underlying asset transactions — may trigger separate VAT consequences.
🛡️ Takaful (Islamic Insurance)
Contributions — exempt financial supply (like conventional insurance premiums). Retakaful — exempt. Surplus distribution — outside scope of VAT. Takaful operator management fee — standard-rated service.