Worldwide interest cap

Tax

A proposal under the OECD's Base erosion and profit shifting (BEPS) initiative.

The worldwide interest cap method is a proposed methodology to limit tax relief for interest and amounts economically equivalent to interest.

It would limit the total amounts eligible for relief to a cap equal to the total of a taxpayer group's net third party interest expense.

The total cap would then be allocated by territory through an appropriate allocation key, for example territory profits as a proportion of total group profits.

An alternative proposed methodology is a fixed-ratio method.

See also

• Common Consolidated Corporate Tax Base
• Corporation Tax
• Diverted profits tax
• Fixed-ratio method
• Tax avoidance
• Transfer pricing
• Double taxation