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The Resource International double taxation of interest : assessing recent developments in thin capitalization regimes

International double taxation of interest : assessing recent developments in thin capitalization regimes

Label
International double taxation of interest : assessing recent developments in thin capitalization regimes
Title
International double taxation of interest : assessing recent developments in thin capitalization regimes
Creator
Subject
Language
  • eng
  • eng
Summary
The problem dealt with in this book stems from the rule that interest is deductible (and dividends are not) in calculating taxable income, unless the interest is caught by thin capitalization or anti-abuse rules. Recently, new analysis has shown that multinational groups can plan their worldwide leverage to minimize their overall tax liability, highlighting the risk of base erosion. This has led some countries and international institutions to introduce or recommend the introduction of new, stricter thin capitalization rules, commonly referred to in this book as "Comprehensive Interest Barriers". This book, after examining the evolution of the tax treatment of interest and thin capitalization rules, carries out a comparative study of some of the domestic regimes that have adopted this new trend of rules, as well as of the OECD recommended approach under BEPS Action 4 and the interest limitation rule adopted under the Anti-Tax Avoidance Directive. On the basis of the examination of these Comprehensive Interest Barriers, this book concludes that these new rules are not in line with basic international tax principles, namely the net income and ability-to-pay principles, the benefit principle and the arm's length principle. In addition, these new rules create economic double taxation of interest and realign the taxing rights regarding the taxation of cross-border interest from the country of residence of the creditor to the source country. On the basis of these conclusions, this book investigates how to implement a single international standard regarding the adequate (i.e. arm's length) capital structure of an entity by proposing the harmonization of the different capitalization requirements applicable to permanent establishments and subsidiaries (the New Capitalization Standard). By implementing the proposed New Capitalization Standard, an international consensus regarding the amount of capital that should generally be attributed to an entity, as well as the manner in which the said total amount of capital should be split between debt and equity capital, would be crafted, and therefore, a solution to the problem of economic double taxation would also be indirectly achieved. This book also addresses the issue of economic double taxation related to any adjustments to the capital structure
http://library.link/vocab/creatorName
Fernandes, S. Martinho
Geographic coverage
International
Index
no index present
Language note
English
Literary form
non fiction
Series statement
IBFD Doctoral series
Series volume
48
http://library.link/vocab/subjectName
  • double taxation
  • interest
  • interest deduction
  • thin capitalization
  • BEPS Project (OECD)
  • ATAD
  • international taxation principles
  • ability to pay
  • benefit principle
  • arm's length principle
Label
International double taxation of interest : assessing recent developments in thin capitalization regimes
Instantiates
Publication
Note
Thesis submitted to KU Leuven in fulfilment of the requirements for the degree of Doctor of Laws (PhD). Degree awarded on 7 May 2018
Extent
xix, 437 p.
Isbn
9789087225469
Isbn Type
(print)
Note
20190815
Label
International double taxation of interest : assessing recent developments in thin capitalization regimes
Publication
Note
Thesis submitted to KU Leuven in fulfilment of the requirements for the degree of Doctor of Laws (PhD). Degree awarded on 7 May 2018
Extent
xix, 437 p.
Isbn
9789087225469
Isbn Type
(print)
Note
20190815

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