ATAD: what does it actually mean for financing?
On 21 June, the Economic and Financial Affairs Council (ECOFIN) reached a consensus on the “Anti-Tax Avoidance Directive” (ATAD). Some of the measures of this Directive directly affect groups’ existing financing set-ups. The main impact is the implementation of BEPS Action 4 via a Directive, which will impose a general interest deduction limitation. Member States
Allocation of acquisition debt: economic rationale is key!
In today’s tax world, having a strong economic rationale to support an entity’s leverage is key. In our recent experience, the tax authorities look at a company’s gearing in 3 ways: Business purpose test: what is the motivation for each entity taking a loan? TP principles: Is the interest rate at arm’s length considering the
OECD is heading toward consensus on interest limitation rules
The OECD and country representatives of the OECD Working Party 11 (‘WP11’) are likely to recommend in the BEPS action plan that local interest limitation rules should focus primarily on an interest/EBITDA cap, whereby countries may set the cap within certain boundaries (30% and 10% likely to be put forward as upper and lower limits). As
BEPS Project: Time to take a closer look at treasury and intercompany financing
OECD Base Erosion & Profit Shifting (BEPS) Project: Time to take a closer look at treasury and intercompany financing Just before the New Year’s break, the OECD issued new discussion drafts in the context of the so-called ‘Base Erosion & Profit Shifting’ project as mandated by the G20, better known as ‘BEPS’. They are particularly
OECD webcast of 15 December 2014: Impact on intercompany financing
Today, the OECD broadcasted a webcast on the progress of its BEPS Action Plan. The expectations of this webcast were very high as the OECD had previously announced it would publish relevant Discussion Drafts after the webcast, which potentially could have a serious impact on intercompany financing. While the OECD gave insights into some items, such as interest deduction
