Fixed ratio method

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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 the group's aggregate tax-EBITDA

See also