OECD releases discussion draft on interest deductions in banking, insurance sectors


On 28 July the OECD released a discussion draft relating to deductions for interest in the banking and insurance sectors. This is part of the ongoing work for BEPS Action 4, Limiting Base Erosion Involving Interest Deductions and Other Financial Payments, which was released as a final report in October 2015.

The discussion draft does not set forth overly prescriptive rules, but rather describes potential ways to address interest for two basic categories: the first category consists of banks and insurance companies, and the second category consists of entities in a group that includes a bank or insurance company.

Comments are due by 8 September 2016. Groups with, and groups of, banks or insurance affiliates should consider the implications of the proposals and respond accordingly.