Fixed ratio method

Tax - anti-avoidance.

The fixed ratio method is a mechanism to limit corporate tax relief for interest and amounts economically equivalent to interest.

It limits the amounts eligible for relief to a percentage of a taxpayer's profits.

Under the UK's Corporate Interest Restriction, with effect from April 2017:

• The fixed ratio for a large worldwide group is 30%
• The measure of profits is the group's aggregate tax-EBITDA

See also

• Business in Europe: Framework for Income Taxation
• Corporate Interest Restriction
• Corporation Tax
• Debt cap
• EBITDA
• Group
• Tax avoidance
• Tax-EBITDA
• Worldwide interest cap