International - Fixed Ratio Thin Capitalization Rules in Conflict with the Arm’s Length Principle and Relative Issues of Deductibility
- K. Asimakopoulos
- International Transfer Pricing Journal, 2012 (Volume 19), No 6
- 2 November 2012
Taxation differences and corporate behaviour result in source countries protecting their tax revenue by limiting the tax deductibility of interest under thin capitalization rules or general anti-avoidance rules, in addition to applying the standard transfer pricing rules. The author considers the relationship between certain approaches to thin capitalization rules and the arm’s length principle.