The Distinct Equity of the Debt-Equity Distinction

The author, against the background of the debate on this issue, attempts to provide some explanations for the enduring existence of the debt-equity distinction, disentangle the issues relevant for different areas of tax law and make proposals for a reinvigorated application of the underlying concepts. Ultimately, the dividing line between debt and equity should follow the teleology of the underlying tax issues in individual, corporate and international income taxation, respectively.