Monday, 20 June 2016

UK launches consultation on tax deductibility of corporate interest expense

The UK HM Treasury published a consultation document on 12 May 2016 concerning the
detailed policy design and implementation of previously-announced proposals to limit the tax
deductibility of corporate interest expense as from 1 April 2017. The consultation comprises 46
questions, and closes on 4 August 2016.
The UK proposals follow the recommended approach set out in the final report for limiting base
erosion involving interest deductions and other financial payments that was issued by the
OECD in October 2015 as part of the G20/OECD BEPS project (specifically action 4; for prior
coverage, see OECD tax alert, 6 October 2015), and have been subject to a previous
consultation in the UK. The basic approach is to limit interest deductions to 30% of tax-based
Source & more info: Deloitte