Commentary

D1.1429 Calculating the corporate interest restriction group ratio percentage and applying the group ratio method

Corporate tax
Corporate tax | Commentary

D1.1429 Calculating the corporate interest restriction group ratio percentage and applying the group ratio method

Corporate tax | Commentary

D1.1429 Calculating the corporate interest restriction group ratio percentage and applying the group ratio method

Calculating the group ratio percentage

The purpose of the group ratio percentage is to apply an alternative percentage to tax- EBITDA as opposed to the default rate of 30% under the fixed ratio method. There would be no advantage in making a group ratio election if the GRP was less than 30%.

The GRP is computed using the formula:

GRP = (QNGIE ÷ group-EBITDA) × 100/1.

In those rare situations where QNGIE is greater than group-EBITDA, GRP is capped at 100%. Furthermore, if the formula would otherwise produce

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