Dividends

The term ‘dividend’ generally refers to any payment or distribution that is declared or paid on or in respect of shares or other rights participating in the profits of the issuer of such shares or rights which does not constitute a return of capital or a return on debt claims.

Dividends may be paid in cash, securities, or other property out of profits, retained earnings, or any other legal, capital, or revenue reserve or account. Dividends include any payment or benefit which in substance or effect constitutes a distribution of profits made or provided in connection with the acquisition, redemption, cancellation or termination of shares or other ownership interests or any transaction or arrangement with related parties that are not in accordance with the arm’s length principle.

Interest

The term ‘interest’ generally refers to any compensation earned by a creditor for the use of their money, whether under a conventional financing arrangement or a financing arrangement that is compliant with Islamic Sharia law.