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Thin capitalization regulations and similar tax limitations on leveraged buy-outs

Thursday 27 August, 14:30-16:00

Commission: Tax Law

General Reporters : Koen Morbée, Michael Nørremark

Most countries have thin capitalization rules limiting the tax deductibility of interest expenses. The rules traditionally refer to an allowed debt/equity ratio. Certain countries even implemented additional tests and also refer to the EBITDA of the debtor, either on a stand alone or on a consolidated basis. These rules have a substantial impact on the tax structuring in case of leverage buy-outs. The workshop highlights the variety of existing rules and tendencies in the international tax practice.