Interest Deductions and Multinational Enterprises: Goldilocks and the Brave New World

This article compares the “brave new” group-wide approach under Action 4 of the G20/OECD Base Erosion and Profit Shifting initiative to the fixed ratio alternative. The conclusion is that the group-wide approach, which is not as novel as some assume, should be supported. Resisting the “Goldilocks” standard of perfection, it can be combined with a modest fixed ratio safe harbour.