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