Commentary

D1.1425 Overview of the corporate interest restriction group ratio method

Corporate tax
Corporate tax | Commentary

D1.1425 Overview of the corporate interest restriction group ratio method

Corporate tax | Commentary

Corporate interest restriction—group ratio method

D1.1425 Overview of the corporate interest restriction group ratio method

The group ratio method is an optional method available by election to groups whose gearing worldwide is higher than 30% of aggregate tax EBITDA. The election is a core part of the corporate interest restriction (CIR) rules which apply from 1 April 2017.

The default fixed ratio seeks to limit the deductibility of interest to 30% of tax-EBITDA although this limit can be lower if the fixed ratio debt cap calculation gives a smaller figure.

Where a group's net interest expense in a period of account

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