ARTICLE · 28 JULY 2021

Interest Limitation Ratio – Feedback Statement Published By Finance Minister

Grant Thornton

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On 2 July 2021 the Minister for Finance, Paschal Donohoe TD, launched a second Feedback Statement on transposition of the ATAD interest limitation ratio.

IrelandTax

On 2 July 2021 the Minister for Finance, Paschal Donohoe TD, launched a second Feedback Statement on transposition of the ATAD interest limitation ratio.

The Anti-Tax Avoidance Directive (ATAD) requires Member States to introduce an interest limitation rule (ILR) to limit base erosion through the use of interest expenses to create excessive interest deductions. The ILR aims to limit the maximum net deduction to 30% of earnings before tax and before deductions for net interest expense, depreciation and amortisation (EBITDA).

This Feedback Statement builds on the previous November 2018 public consultation on implementation of the ATAD Anti-Hybrid rules and ILR and the December 2020 ATAD ILR Feedback Statement and proposes suggestions for draft legislation for the ILR provision as a whole. Due to the complexities noted in the previous feedback statement, a nine step approach has been devised which aims to simplify the application of the ILR as an adjustment to

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