Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments April 9, 2022 erstellt
Description:
Because of the different tax treatment of debt and equity, for companies financing is a potent tax planning tool both at the domestic and international level. The different treatment often involves a tax advantage for companies to finance their investment by debt. For tax authorities, contrasting this phenomenon is difficult because they must balance their revenue protection with tax certainty for taxpayers. So, commonly, tax systems require additional legislation for regulating new financing-based tax avoidance schemes and consequently become more complex. Part I of this paper analyses the different tax treatment of debt and equity. Part II, by examining the UK case, presents how tax authorities generally responds to domestic financing-based tax avoidance schemes. Part III, by exploring the role played by double tax treaties (DTTs) and the OECD’s Action Plan on Base Erosion and Profit Shifting (BEPS), covers how countries contrast cross-border financing-based tax avoidance schemes