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Governments and international organisations have introduced various measures to reduce profit shifting and excessive interest deductions.
Governments and international organisations have introduced various measures to reduce profit shifting and excessive interest deductions.
The OECD BEPS Action Plan was introduced to combat international tax avoidance strategies.
Countries limit excessive interest deductions to prevent earnings stripping practices.
Interest deductions are restricted based on a percentage of EBITDA, commonly 30%.
Companies must maintain proper documentation to justify related-party transactions.
References: OECD BEPS Action 4 Report (2015); OECD BEPS Action 8 Guidance (2018).
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