OECD Consults On Interest Deductions, Financial Payments
by Ulrika Lomas, Tax-News.com, Brussels
26 December 2014
On December 18, 2014, the Organisation for Economic Cooperation and Development (OECD) released for public comments a discussion draft on base erosion and profit shifting (BEPS) Action 4, on interest deductions and other financial payments.
The discussion draft stresses the need to address BEPS using deductible payments such as interest that can give rise to double non-taxation in both inbound and outbound investment scenarios. It examines existing approaches to tackling these issues and sets out different options for approaches that may be included in a best practice recommendation. The discussion draft considers issues including:
- What is interest and what are payments economically equivalent to interest;
- Who a rule should apply to, and specifically, whether a rule should apply to the level of debt or interest expense, and to a gross or net position;
- Whether a small entity exception or threshold should apply;
- Whether interest deductions be limited with reference to the position of an entity's group;
- Whether interest deductions be limited with reference to a fixed ratio;
- Whether a combined approach be applied;
- The role of targeted rules;
- The treatment of non-deductible interest expense and double taxation;
- Considerations for groups in specific sectors; and
- Interaction with other areas of the BEPS Action Plan.
The OECD is to accept responses on the discussion draft until February 6, 2015. The discussion draft will be subject to a public consultation at the OECD Conference Centre in Paris on February 17, 2015.
To see today's news, click here.
Tax-News Reviews

A review and forecast of Cyprus's international business, legal and investment climate.

A review and forecast of Malta's international business, legal and investment climate.

A review and forecast of Jersey's international business, legal and investment climate.

A review of the latest budget news and government financial statements from around the world.
Stay Updated
Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.
By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.
To manage your mailing list preferences, please click here »