Recent Draft Legislation – Limitation On Excessive Interest And Financing Expenses

This updated is intended for those seeking additional insights into the revised draft legislative proposals regarding the proposed excessive interest and financing expenses limitation regime released in November 2022.

Overview

On November 3, 2022, the Department of Finance released revised draft legislative proposals in respect of the new excessive interest and financing expenses limitation regime (the "EIFEL Regime"). The Department originally released draft legislative provisions in respect of the regime on February 4^th, 2022 (the "Original Proposals"). The EIFEL Regime limits the amount of interest and financing expenses that a taxpayer may deduct in calculating its taxable income to the extent that such interest and financing expenses exceed a fixed percentage of earnings before interest, taxes, depreciation, and amortization ("EBITDA").