SECOND EUROPEAN REGION CONFERENCE

MILAN 20-21 MAY 2021- HOTEL PRINCIPE DI SAVOIA

MOBILITY OF CAPITAL – RESHAPING GROUP DEBT WITHIN EUROPE

Chair: Dennis Weber

  • Domestic GAAR or SAAR on group debt allocation
  • Implementation of ATAD including optional provisions
  • Role of tax treaties

 

The Break-out Session I shall address the reshaping of corporate capital structures of MNEs within Europe in light of the recent regulatory developments to impose interest deductibility restrictions.

The panellists will discuss diverse ways in which Member States implemented the ATAD interest-limitation rule as well as other trends in the application of GAAR or SAAR to group debt allocation. Country-specific experiences in adopting and applying new rules will be the focus of the session.

Safe harbours or other favourable rules relating to allocation, which the ATAD permits Member States to include in the implementing legislation, might lead to tax competition among Member States and tax-driven driven decisions to reshape group capital structure within Europe. This effect might be undesirable in the EU single market and contradictory to the goals of the Directive.

In addition, the panel will aim to address the interest limitation rules in a wider context of EU law, in particular in light of the relatively recent CJEU judgement in the Lexel case (C-484/19). Upon the availability of a full proposal for an EU directive on Debt-Equity Bias Reduction Allowance (DEBRA), the panel will devote a part of the discussion to it.

Last but not least, the panel will assess whether the current interest limitation rules are adequate in dealing with turbulent economic conditions such as those experienced during the COVID-19 Pandemic.