<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>The anti-tax avoidance directive (ATAD) implemented in the EU countries in 2019 has brought, among other things, a common rule for tax-deductibility of exceeding borrowing costs of corporate taxpayers – the interest limitation rule. For interest limitation, the Czech Republic had so far used the so-called safe haven thin capitalisation rule. With the implementation of ATAD, companies need to test not only the thin capitalisation rule but also the new interest limitation rule according to ATAD. This paper aims to review the impact of the new interest limitation rule on the 200 largest Czech companies by their 2017 revenue as recorded in the Albertina database. Results covering the new rules, i.e. following the ATAD implementation, are being compared to the situation before the implementation. Most of the analysed companies seem unaffected by the new interest limitation rule. The analysis also showed that most of the analysed companies do not imply exceeding borrowing costs, either before or following the ATAD implementation.</p></abstract>

The anti-tax avoidance directive (ATAD) implemented in the EU countries in 2019 has brought, among other things, a common rule for tax-deductibility of exceeding borrowing costs of corporate taxpayers – the interest limitation rule. For interest limitation, the Czech Republic had so far used the so-called safe haven thin capitalisation rule. With the implementation of ATAD, companies need to test not only the thin capitalisation rule but also the new interest limitation rule according to ATAD. This paper aims to review the impact of the new interest limitation rule on the 200 largest Czech companies by their 2017 revenue as recorded in the Albertina database. Results covering the new rules, i.e. following the ATAD implementation, are being compared to the situation before the implementation. Most of the analysed companies seem unaffected by the new interest limitation rule. The analysis also showed that most of the analysed companies do not imply exceeding borrowing costs, either before or following the ATAD implementation.

Interest Limitation Rule Under ATAD: Case of the Czech Republic

DANUBE

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Interest Limitation Rule Under ATAD: Case of the Czech Republic"}

The anti-tax avoidance directive (ATAD) implemented in the EU countries in 2019 has brought, among other things, a common rule for tax-deductibility of...

Interest Limitation Rule Under ATAD: Case of the Czech Republic

Published Online: Jul 23, 2021

Page range: 121 - 134

DOI: https://doi.org/10.2478/danb-2021-0009

Keywords
ATAD, BEPS, Thin Capitalisation Rule, Interest Limitation Rule

© 2021 Aneta Pivoňková, Jana Tepperová, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

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Interest Limitation Rule Under ATAD: Case of the Czech Republic

Published Online: Jul 23, 2021

Page range: 121 - 134

DOI: https://doi.org/10.2478/danb-2021-0009

KeywordsATAD, BEPS, Thin Capitalisation Rule, Interest Limitation Rule

© 2021 Aneta Pivoňková, Jana Tepperová, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Figure 1

Figure 2

Figure 3

Figure 4

Keywords
ATAD, BEPS, Thin Capitalisation Rule, Interest Limitation Rule