- Restrictions on interest expense deduction
Restrictions on interest expense deduction
There are two sets of rules which disallow interest paid to foreign related companies. One is the thin capitalisation rule and the other is the earnings stripping rule. Both rules are targeted rules under BEPS Action 4. A fixed ratio approach where the general deduction of interest expense is restricted to a certain percentage of EBITDA under BEPS Action 4, has not been introduced.