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Source OECD iLibrary
Content type Text
Publisher OECD Publishing
Language English
Subject Domain (in DDC) Social sciences ♦ Economics ♦ Public finance
Subject Keyword Taxation
Abstract The mobility and fungibility of money makes it possible for multinational groups to achieve favourable tax results by adjusting the amount of debt in a group entity. The recommended approach ensures that an entity’s net interest deductions are directly linked to its level of economic activity, based on taxable earnings before deducting net interest expense, depreciation and amortisation (EBITDA). This approach includes three parts: a fixed ratio rule based on a benchmark net interest/EBITDA ratio; a group ratio rule which allows an entity to deduct more interest expense in certain circumstances based on the position of its worldwide group; and targeted rules to address specific risks. A country may choose not to introduce the group ratio rule, but in this case it should apply the fixed ratio rule to multinational and domestic groups without improper discrimination.
Learning Resource Type Book
Publisher Date 2015-10-05
e-ISBN 9789264241176
Organization OECD
Page Count 96


Source: OECD iLibrary