DEBRA
From ACT Wiki
Tax - tax avoidance - European Union (EU).
Abbreviation for the Debt-equity bias reduction allowance tax initiative of the EU.
The EU's DEBRA tax initiative aims to encourage companies to finance themselves with equity rather than with debt financing.
- Reducing the risk of bankruptcies
- "Over-indebtedness could threaten the stability of the financial system and increase the risk of bankruptcies, which would in turn increase unemployment.
- "The [DEBRA] initiative will introduce an allowance for equity-financed new investment, to mitigate debt bias.
- "The whole scheme will incorporate a number of robust anti-tax avoidance rules to ensure tax fairness."
- DEBRA - proposal for a Directive - European Commission.
- DEBRA - what we're consulting on
- "The objective of the consultation is to collect views and opinions... on the perception of the tax induced debt-equity bias and the possible solutions to tackle it.
- To this aim, the consultation will gather information and knowledge on the existence and magnitude of indebtedness due to the tax debt bias and potential impacts of the policy options...
- The information gathered through the consultation will comprise the definition of equity, the reasons for indebtedness of EU companies, possible solutions to address the tax induced debt-equity bias, the appropriate level of the notional interest rate for an allowance on equity, or the need for a higher rate for SMEs.
- Concerning the anti-abuse framework, the input gathered through the consultation should provide us with information on stakeholders’ views on an effective, proportionate and dissuasive framework of anti-abuse rules linked to the measure."
- DEBRA - consultation - European Commission.
The act of making laws, regulations, systems or practices the same - or sufficiently similar - in different countries, companies or the like, so that they can work together more easily.
The potential benefits of harmonisation include:
- Spreading better practices and appropriate standards more widely, more quickly.
- Reducing the scope for tax arbitrage, regulatory arbitrage and smuggling.
- Reducing error rates in reporting.
- Saving reporting and other administration costs.
- Tax base harmonisation
- "Agreement on tax base harmonisation has been a slow process.
- Supporters of harmonisation continue to argue the case, especially before their domestic electorates.
- Supporters of harmonisation have also proposed the introduction of a common tax base among a voluntary coalition of willing Member States if agreement among all Member States is not forthcoming."
- Common Consolidated Corporate Tax Base - Treasurer's Wiki
- Accounting harmonisation for crypto-assets
- "The regulation on prudential requirements for credit institutions... as it currently stands, is not tailored to crypto-assets in light of their high volatility...
- A classification of crypto-assets as intangible assets (IAS 38) would automatically mean that crypto-assets would be deducted prudentially. Accounting standard setting bodies/authorities could pursue a harmonised accounting treatment by prescribing that banks should account for crypto-assets as intangible assets."
- Crypto-assets - European Central Bank
- Accepting some inconsistency
- "Existential coaching recognises that the client's worldview will only rarely be complete, coherent or consistent.
- Whilst some aspects will be reconcilable, others will be incapable of being resolved or harmonised."
- Worldview - the Treasurer's Wiki
2. European Union (EU).
In the EU context, harmonisation refers to the determination of EU-wide legally binding standards to be met in all Member States.
Also spelt Harmonization.
See also
- Allowance
- Bankruptcy
- Business in Europe: Framework for Income Taxation
- Cryptoassets
- Debt
- Debt equity ratio
- Debt for equity swap
- Directive
- Equity
- Equivalence
- European Central Bank
- European Commission
- European Union
- European Union (Withdrawal Agreement) Act 2020
- Existential coaching
- Goal congruence
- Member state
- Payments and payment systems
- Protectionism
- Regulatory arbitrage
- Smuggling
- Tax
- Tax arbitrage
- Tax avoidance
- Tax harmonisation
- Worldview
