Thin Capitalisation Rule in India

The author is Barsha, a Fourth Year Student from National Law University, Odisha.

Abstract:

With the growing trends of Multinational Companies employing Debt financing instead of equity financing, not only the capital structure of the Companies were distorted, but also the problem of profit shifting and base erosion occurred. Even though the origin of the implementation of thin capitalisation rules in India can be traced back to OECD guidelines, there were a handful of nations that had implemented the rule even before the OECD had acknowledged the problem. What has become imperative to note is that where on the one hand excessive debt would enhance the macroeconomic instability, the impact of the thin capitalisation rule is not wholly positive in the economic context. The paper has attempted to analyse the thin capitalisation rules in India by delving into the history of the Rule at the global level. In the study, it is revealed that the approach taken by India is relatively liberal, and it aligns with the global standards for preventing the tax abuse practices of profit shifting and base erosion. However, the existing rule is rather at a nascent phase and requires further development. The study also emphasises that while the earnings stripping approach used by India is more efficient than the safe harbour rule, with regards to combating the abuse practices, the parameter of EBITDA can be susceptible to manipulation.

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Introduction:

A Corporation can opt for any of the modes of financing—debt or equity. For a Corporation seeking financial investment, debt financing is more attractive because of the tax-deductible nature of the interest paid on debt, unlike the corporate tax charged on dividends paid for equity capital. When corporations opt for debt financing instead of equity to reduce their taxable income, the debt-to-equity ratio of the corporation is heavily impacted. An appropriate debt-to-equity ratio is crucial to ensure the optimization of the Capital Structure. When the debt of the Corporation is relatively higher than the equity, the Corporation is said to be thinly capitalized. 

To put it simply, Multinational Companies carefully plan their tax avoidance strategies by allocating capital and financial instruments to their foreign Subsidiary in accordance with the prevalent tax liability in various jurisdictions where their Subsidiaries have fixed bases. In this arrangement, a Subsidiary which has a fixed base in a low-tax jurisdiction is allocated more equity, and the subsidiaries having a fixed base in high-tax jurisdictions are often funded with debt. In this arrangement, the income of the higher tax jurisdiction is stripped to a lower tax jurisdiction. This gives rise to the problem of profit shifting. [i]

With the growing trends of Multinational Companies employing Debt financing to avoid tax liability, nations have introduced Thin Capitalisation rules to impose restrictions on such practices. In this light, the collaboration between the Organisation for Economic Co-operation and Development (“OECD”) and the Group of Twenty (“G20”) countries identified the deductibility of interest expenses as an important area of attention under the Base Erosion and Profit Shifting (“BEPS”) Project. [ii] In this study, we will focus on the origin of the Thin Capitalisation Rule from OECD, the Thin Capitalisation Rule as implemented in India and move on to compare it with the Rule enforced in other nations. 

History

The differential tax treatment of interest and dividend has led to Multinational Companies arranging finance in the form of Debts rather than equity, which in turn distorted their debt-equity ratio and Capital Structure. In 1979, the OECD, in its report, took into cognisance of such tax abuse practices. [iii] The 145th issue of the OECD Observer discussed the two existing approaches to prevent such abuse [iv]:

1. The proportion of debt owed to a particular Corporation was determined based on the general anti-abuse laws or the arm's length principle.  The excessive interest payments were then disallowed. 

2. A fixed debt-to-equity ratio was set, and any interest payments exceeding such ratio were disallowed.

These measures were implemented at a national level, and complications arose at the international level. The 145th Observer pointed out that these complications arose in relation to the different criteria for treatment of excessive interest existing in the Nation States. [v]

The cooperation of OECD and G20 countries observed that the Multinational Companies exploited the loopholes in the tax regime, which led to the artificial shifting of low or no tax locations to avoid tax burdens. The two tax planning strategies employed are intra-group debt and third-party debt. In intra-group debt, the Multinational Group shifted the income from high tax jurisdiction to low tax jurisdiction through intra-group interest expense. [vi] In third-party debt, any one entity of the group of Multinational Companies bears a considerably large portion of the total interest expense belonging to the group in its entirety. To tackle such practices, the BEPS 2015 recommended policies to set a certain limit on the allowable net interest deductions linking it to the economic activity of the Multinational Companies. The economic activity was measured using taxable earnings before interest, taxes, depreciation, and amortisation (“EBITDA”). The suggested benchmark ratio for the allowable interest payments ranges from 10 per cent to 30 percent of EBITDA. [vii]

For designing and implementing the Thin Capitalisation rule in various jurisdictions around the world, the following features have to be taken into consideration:

1. Applicability to the net interest or gross interest

2. Concerned type of debt – related party debt or third-party debt

3. Reference to the Debt-to-equity ratio (Safe Haven Rule) or interest-to-earnings ratio (Earning Stripping Rule). 

4. Decide the allowable threshold

5. Applicable Exclusion Clause

6. Provision for carry back and carry forward of disallowed interest. 

   
   

The BEPS project of the OECD laid down the following three methods for Thin Capitalisation rule implementation:

1. Setting a default fixed ratio limit

2. The limitation is subjected to the interest expenditure overall group of the entity

3. Rules targeting specific transactions where the arrangement is made to inflate interest expenditure

   
   

The purpose of the Thin Capitalisation Rule is to prevent base erosion and the shifting of profits to lower tax jurisdictions. The rules, however,  do not suggest equal treatment of debt and equity for taxation purposes. Even if the Rules deal with the difference in the tax treatment of debt and equity, the rule just minimises the tax benefit allowed to interest expenses. [viii]

OECD MODEL CONVENTION

In the context of the taxation of cross-border transactions, the OECD Model Tax Convention has been referred to as an international standard for the application and interpretation of Tax Treaties between nation-states. Article 10, [ix] providing taxability on the dividends, deals with interest on debt where the Creditor effectively shares the risks run by the company. That is to say, in cases where the repayment of the debt is largely dependent on the success of the business of the enterprise, the interest can be treated as a Dividend. This article strikes out the equity disguised in the form of debt and brings the payment generated from such financial instruments within its ambit.

Article 11 states that the taxation right of interest accrued in one State and paid to the beneficial owner of another State is reserved with the latter State. When the interest is paid to a non-resident entity, the taxing right on such interest payment is with the State of Residency of such non-resident entity who is the Beneficial Owner to whom the interest is paid. The sub-clause 6 of the Article points out that when an excess amount of interest is paid on the borrowing on the grounds of an existent special relationship between the Payer and the Beneficial Owner, the excess amount of interest paid will be taxed in the Source State. [x] However, when the interest is agreed at a lower rate due to the special relationship, Article 11(6) is not attracted.

A special relationship can be said to exist between the Payer and the Beneficial Owner directly or even indirectly through a third party. 

The commentary of Klaus Vogel has categorised special relationships into two types: “association under company law” and “relationship by blood or marriage”. The former involves control, either direct or indirect, and the latter involves community interest. The said special relationship has to have attributed the interest paid to have exceeded the reasonable interest.  [xi]

From the understanding of these two Articles in the OECD, it can be safely deduced that they are in line with the Thin Capitalisation Rules. The inclusion of these rules in the OECD  Convention was crucial given that the profit-shifting practices were implemented in international transactions primarily, and merely the national laws were not enough to tackle such practices.

INDIAN CONTEXT

The Report Of The Working Group On Non-Resident Taxation [xii] in 2003 pointed out the practice of enterprises to classify equity as debt to take advantage of the deductions on profit accrued. In light of the same, the Report recommended the introduction of an anti-abuse rule for Thin Capitalization. The Direct Tax Code 2010 included a provision related to Thin Capitalisation in the General Anti-Avoidance Rule. Section 123 (1) (f) prohibits any arrangement that recharacterizes equity into debt to avoid tax implications. [xiii] Although the provision was vague, it can be traced as the first initiative by the Indian Government to avoid hidden capitalisation.

The Finance Act of 2017 introduced the Thin Capitalisation Rule to the Income Tax Act (hereinafter referred to as “Act”) through the insertion of Section 94B. [xiv] The Section is applicable to Indian Companies and Foreign Companies with Permanent Establishments in India where the net interest payable exceeds one crore rupees. The allowable interest payment is limited to thirty percent of EBITDA. [xv] The limitation is premised on the interest-to-earnings ratio which is called as Earning Striping Rule.

Such limitation is applicable only when the related party debts are issued by a non-resident Associated Enterprise (“AE”). This limitation even extends to the case where the unrelated party is the creditor of the debt for which the AE provides the creditor either with a guarantee or funds corresponding to the debt amount.

The excess disallowed interest is allowed to be carried forward for a consecutive eight years. When the actual payable interest falls short of the value amounting to thirty percent of EBITDA, the carried forward excess disallowed interest can be set off against the difference between allowable interest and payable interest. This clause is beneficial to the taxpayer as it mitigates the effect of the limitation imposed by the rule. [xvi] The interest expenses and the EBITDA might not be incurred in the same year which makes the carry forward clause more reasonable. It must be noted that the company engaged in either Banking or Insurance business is excluded from this provision. [xvii]

Even though the Indian Rule of Thin Capitalisation covers all the features of the standard Thin Capitalization Rule prescribed by the OECD, it is evident that the development of the rule in India is pretty slow and at a preliminary stage. It must also be understood that the Thin Capitalisation Rule implemented in India is considered a liberal approach to curb base erosion and profit shifting.

When deliberating on the practice of Multinational Companies using debt capital instead of equity capital to avoid tax burden, the use of Compulsorily Convertible Debenture (“CCD”) comes into play as it is a prominent hybrid Foreign Direct Investment mode. With a long-standing debate on the treatment of CCD as debt or equity, the question of the applicability of Section 94B of the Act to the interest paid on CCD becomes imperative.  This debate stems from the dual characteristics of the CCDS which is issued as a debt instrument and gets converted as equity instrument. The Supreme Court in Narendra Kumar Maheshwari v UOI [xviii] held that in its classic sense, CCDs do not constitute debenture and went further to point that the instruments that are compulsorily convertible are regarded as equity.  The court in this judgement relied on the principle of “Substance over form” to come to the conclusion. It noted that since the obligation of repayment  was absent, the CCD can not be regarded as debt in substance. The two judge bench, in the Narendra Kumar Maheshwari case, premised their ruling of treating CCD as equity on the absence of obligation of repayment. This was contrary to the ruling of a three judge bench of the Court in Commissioner Of Wealth-Tax, Madras vs Spencer And Co. Ltd. [xix] In the said case, it was held that when the liability to pay back is discharged by the transfer of share, the character of the liability does not change.  Further,  the Court in Eastern Investments vs CIT [xx] pointed out that there was no difference, in principle, between paying in cash and transfer of shares for the issue of debentures.

From the perspective of the Reserve Bank of India, the guidelines have clarified that CCD does not have repayment obligations, therefore, for FDI purposes, CCD constitutes equity. [xxi] However, in tax jurisprudence, the same cannot be constructed for determining interest allowable for deduction from taxable income in the pre-conversion phase. The Bangalore Tribunal in CAE Flight Training (India) (P) Ltd. vs Dy. CIT [xxii] held that in the pre-conversion phase, CCDs do not carry voting rights and dividend rights similar to the equity share and must be treated as debt.  Likewise in Religare Finvest Ltd. v. DCIT, [xxiii] the CCDs were concluded to be borrowed funds treated as debts and the interest paid on such CCDs are allowed as deduction under the heads of Profit and Gains of business or profession. It is a res judicata principle that during the pre-conversion period, the CCD is treated as debt until converted into equity. [xxiv] Therefore, when a Company issues CCD to its AEs, it must comply with the thin capitalisation rule, and any interest payment in excess of thirty percent of EBITDA shall be disallowed for deduction from taxable income.

In the case of WeWork India Management (P.) Ltd. vs DCIT, [xxv] the Assessee Company had issued 33,75,000 CCDs to its AEs at an interest of six per cent per annum with conversion tenure up to 20 years. For the relevant assessment year, the Assessee Company had disavowed interest payable to the AEs in the return of income, invoking the thin capitalisation rule. The  Transfer Pricing Officer (“TPO”) classified the CCDs as equity rather than debt and determined the Arm's Length Price (“ALP”) of the interest to be Nil, reasoning that the financial position of the Assessee Company was skewed and made the related Transfer Pricing (“TP”) Adjustment. The Bangalore Tribunal directed the deletion of the TP Adjustment made about the interest payment. The order of the Tribunal favoured the Assessee Company and emphasised that CCD in the pre-conversion period was to be treated as a debt instrument. Therefore, we can conclude that the interest paid for CCDs shall be subjected to the thin capitalisation rule rather than making a TP adjustment on the interest payable based on ALP calculations. 

A litigation issue with the thin capitalisation rule is that it was introduced in 2017 with a retrospective effect. It does not apply to even the Assessment Year 2017-18. [xxvi] Therefore, there can be no disallowance of the interest paid on borrowing in the Assessment Years when the Thin Capitalisation Rule was not in force. Another litigation issue that is most likely to arise is that relating to the interpretation of the phrase “expenditure by way of interest or of similar nature”. Interest under Section 94B is to be understood as defined under Section 2 (28A) of the Act which provides as follows

“Interest means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised” [xxvii]

Expenditure of a similar nature might include the following:

1. Management Fees associated with External Commercial Borrowings [xxviii]

2. Usance charges paid for delayed payment of goods [xxix]

The list is not exhaustive. However, since the Act provides no exhaustive list, it is going to be the task of the Courts to interpret the same.

EFFICIENCY OF EARNINGS STRIPPING

As discussed above, the Thin Capitalisation Rule implemented in India is called Earning Stripping. Likewise, the benchmark ratio of 10 to 30 percent of the EBITDA suggested by the OECD BEPS paper is also an Earning Stripping Rule. The Earning Stripping Rule is based on the interest-to-earnings ratio of the Enterprise. According to the OECD, the EBITDA is an indicator representing the cash flow of the entity and, therefore, determines financial stability to borrow debt. The linking of the interest deduction to earnings creates a nexus between the interest deduction and economic activity. [xxx] So, the rule disallowing the interest based on EBITDA seems credible, aligning with the purpose of the Thin Capitalisation Rule.  As a parameter for measuring cash flow, EBIDITA faced criticism from the Report by Moody’s Investors Service. The Report revealed that through aggressive accounting policies, [xxxi]EBITDA is susceptible to manipulation, making it rather unreliable.

Dirk Schindler and Hendrik Vrijburg, in their 2019 report, pointed out that the Earning Stripping Rule would be efficient in combating other taxation avoidance strategies, such as transfer price manipulation. [xxxii] Therefore, the consequence of the earnings-stripping rule will be welfare at a higher level than the Safe Harbour Rule, where firms can manipulate transfer prices. Further, as compared to the Safe Harbour Rule, which limits the amount of internal debts, the earnings-stripping rule limits the value of interest expenses. [xxxiii] Therefore, the earnings-stripping rule seems more efficient. There have been recent trends of countries shifting from the Safe Harbour Rule to the earnings-stripping rule.

In the study of Schindler and Vrijburg, they recommended the introduction of the Earning Stripping Rule over the existing Dutch law. [xxxiv] These rules enhance the tax burden for MNCs and the cost of capital investment put in the affiliates. Therefore, we can say thin capitalisation rules impact the investment received from the foreign AEs. [xxxv] Reports indicate that for an average corporate income tax of 27 per cent, thin capitalisation rules reduce the investment of the MNC by 20 per cent. [xxxvi] According to the study conducted by Schindler and Vrijburg, the companies that do not engage in base erosion practices will not be impacted. [xxxvii] It is imperative to note that such a conclusion assumes that the base erosion does not occur when the interest payment is less than 30 percent of the EBITDA. Therefore, the likelihood of being effective in combating the base erosion practice depends on the allowable default limit of EBITDA in place. The research by OECD in BEPS Action 4 Report 2015, Annexure B shows that for the year 2013 on the one hand, 30 percent EBITDA limit affected a total of 22 percent of non-multinational companies and 18 percent of multinational companies, on the other hand, 10 percent EBITDA limit affected 43 percent of non-multinational companies and 38 percent of multinational companies. [xxxviii] A higher percentage of the EBITDA limit allowable, as in India, is a moral signal to the taxpayers that higher borrowing is allowable for taxation purposes. This shall act as an encouragement for the Foreign Direct Investment influx to Indian markets.

The premise behind the Thin Capitalisation Rule is determining the economic substance of the  interest expenditure rather than its legal form. A comparison drawn between Earnings Stripping Rules and Safe Haven Rule show that the former target the excessive interest with respect to the earnings of the Company in the relevant Financial Year  while the later evaluates the capital structure of the Company.  It is clear that the former is more directly linked to profit-shifting via interest deductions. It is flexible reflecting the profitability and the earning in each Previous Year as opposed to the static leverage ratio of the Safe Haven Rule. So, it can be safely deduced that the  Earnings Stripping Rules are more efficient than the Safe Haven Rule.

There is, however, no concrete basis to state that interest payments exceeding 30 percent of EBITDA are necessarily coloured instruments. The Earnings Stripping Rule, while effective in curbing aggressive tax planning through excessive interest deductions, demonstrates certain inefficiencies in its application—particularly in capital-intensive industries. Sectors like infrastructure, manufacturing, aviation, and energy, which inherently require significant upfront investment and rely heavily on debt financing, often incur high interest costs as part of their legitimate business operations. Under the Earnings Stripping Rule, however, even these genuine interest expenses can be partially disallowed if they exceed the prescribed threshold, thereby increasing the effective tax liability of companies operating in such sectors. This disallowance does not necessarily indicate tax avoidance but may instead penalize the economic reality of industries where debt is structurally necessary.

The gap in the efficiency of the Earning Stripping Rule arises in the terms of the loan taken for the capital expenditure. When a company obtains a loan to acquire capital assets, the interest on such loans is often capitalised—that is, it is not charged to the profit and loss account as an expense but instead added to the cost of the asset.  This capitalised interest then gets recovered indirectly through depreciation over the useful life period of the capital asset. The uniform application of the  Earning Stripping Rule to the capitalised interest could lead to double disallowance—first under the Rule  and then again through a reduced depreciation base. Thus, while the Earnings Stripping Rule plays a crucial role in checking profit shifting, its blanket application without accounting for sectoral nuances or the economic rationale of higher interest burdens can diminish its overall efficiency.

Section 94B provides for the carry forward disallowed interest for up to eight assessment years.  Interest expenses and business earnings differ for different assessment years. With the carry-forward clause, the assessee company is not unfairly penalized in low-EBITDA years; thus increasing the temporal efficiency of the rule. This Clause makes the Earning Stripping Rule economically neutral, adjusting the volatile business cycles. Therefore, aiding in the mitigation of the short-term compliance costs, which will encourage the long-term investment without undermining the anti-abuse rule.

WAY FORWARD

The exception to the Thin Capitalisation Rule of India is Financial Undertakings. This is a common exception in place in other nations around the world. This exception is reasonable as Financial Undertakings such as Banking and Insurance Companies are usually recipients of interest payments rather than payers. Therefore, specific Thin Capitalisation Rules targeting Financial Undertakings should be implemented. In the Netherlands, such rules were implemented in 2020, which provided for a minimum leverage ratio of up to 8 per cent for Banking and Insurance Companies. Such a step was taken to disincentive the debt in the financial sectors. Under the rules, the equity ratio (“ER”) of the institute is computed on the last day of the relevant calendar year. If the ER is less than 8 per cent, a part of the interest is disallowed from the deduction. The formula for the disallowed interest is (8 - ER)/ (100-ER) of the interest expenses. Such a rule shall be introduced in the Indian Thin Capitalisation Rule.

A lacuna inherent  in the Indian Thin Capitalisation rule is the lack of  clear framework of interpretation.  Firstly, the issue  pertains to the treatment of carried-forward interest. Even though the carry-forward clause is quite dynamic, the lack of clarity on the workings of the  mechanism would render it ineffective. There is no clarity whether, in the subsequent Assessment Year, the allowable 30% deduction should first be applied to the interest of the relevant Previous Year or to the carried forward and  disallowed interest of the preceding Previous Year. Further, a greater clarity is required on the inclusion of previously disallowed interest in total interest payable in the upcoming Assessment Years. A uniform method of calculation needs to be codified to ensure consistency and predictability in compliance. Secondly, the definition of “implicit or explicit guarantee” has no statutory mentions. Its clear interpretation is especially necessary to classify the financial instruments as loans under the Thin Capitalisation Rule.  Thirdly, the ambiguity surrounds the term “interest or similar nature” which is the most essential ingredient to establish the scope of disallowable expenditure.  The lack of the clear interpretation of these terms could lead to excessive and arbitrary application of the rule to unrelated financial instruments and expenses. Therefore, the policymakers must consider issuing detailed circulars or explanatory notes that provide clarity to the interpretational framework of the provision. Further, a consultative approach of  involving stakeholders from industry and tax practice can be taken by the policy-makers so that the Rule not only effectively prevents base erosion but also ensures equitable enforcement.

CONCLUSION

Nations states around the world have introduced the Thin Capitalisation Rule to combat the Tax Planning Strategies by Multinational Enterprises. However, the nature of Foreign Direct Investment inflow into a nation is crucial from the point of view of the Thin Capitalisation Rule in place. Where on one hand excessive debt would enhance macroeconomic instability, the impact of the thin capitalisation rule is not wholly positive in the economic context.  In India, the Thin Capitalisation Rule is, however, liberal enough to attract foreign investment and curb the excess interest expenses. The Rule is also nascent and requires development to disincentive the interest expenses. Moving forward, the policymakers should consider implementing specific target rules for financial undertakings, and providing a clearer framework for the issues relating to the interpretation of the Section 94B. These modifications would likely strengthen the efficiency of Thin Capitalisation Rules’ effort to combat tax abuse practices while encouraging foreign investment inflows.

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References

[i] Erik Cederwall, ‘Making Sense of Profit Shifting: Edward Kleinbard’ (Tax Foundation, 15 May 2015) https://taxfoundation.org/blog/making-sense-profit-shifting-edward-kleinbard/

[ii] Base Erosion and Profit Shifting 2015, Action 4: Interest Limitation Rules

[iii]  Report of OECD Committee on Fiscal Affairs, 1979, ‘Transfer Pricing and Multinational Enterprises’ 85-89

[iv]  OECD, ‘Thin Capitalization Ensuring Company Profits are Correctly Taxed’, (1987) 145 OECD Observer 31

[v] ibid

[vi] Stan Stevens, ‘Evaluation of the Earnings Stripping Rules’, (2020) 29 (4) EC Tax Review 158

[vii] Base Erosion and Profit Shifting 2015, Action 4: Interest Limitation Rules

[viii] Johanna Hey, ‘Base Erosion and Profit Shifting’, (2014) Bulletin For International Taxation 332

[ix] OECD Model Tax Convention 2017, Art. 10

[x] OECD Model Tax Convention 2017, Art. 11(6)

[xi] ‘Klaus Vogel on Double Taxation Conventions’ (3rd ed, Wolters Kluwer) 758

[xii] Department of Economic Affairs, ‘Report Of The Working Group On Non-Resident Taxation’ (2003) <https://dea.gov.in/sites/default/files/NonResTax.pdf>

[xiii] Direct Tax Code 2010, s. 123(1)

[xiv] Income Tax Act 1961, s.94B

[xv] Income Tax Act 1961, s.94B(2)

[xvi] Stan Stevens, ‘Evaluation of the Earnings Stripping Rules’, (2020) 29 (4) EC Tax Review 158

[xvii] Income Tax Act 1961, s.94B(3)

[xviii] (1990) Suppl. SCC 440.

[xix] AIR 1973 SC 2376.

[xx] AIR 1951 SC AIR  278.

[xxi] Foreign Investments in Debentures —Revised Guidelines 2007, para 2.

[xxii] [2023] 150 taxmann.com 276. 

[xxiii] ITA Nos. 4796/Del/2017

[xxiv] Summit Development (P .) Ltd. v. Dy. CIT [IT (TP) Appeal No. 794 (Bang.) of 2022

[xxv] WeWork India Management (P.) Ltd. vs DCIT,[2023] 150 taxmann.com 432 (Bangalore - Trib.)

[xxvi] Praxair India Private Limited v DCIT, IT(TP)A No.187/Bang/2023

[xxvii] Income Tax Act 1961, s.2(28A)

[xxviii] Aka Ausfuhrrkreditgesellschaft MBH vs. ACIT [2024] 158 taxmann.com 627 (Delhi - Trib.)

[xxix] ACIT vs. Overseas Trading and Shipping Co. (P.) Ltd. [2018] 99 taxmann.com 136 (Rajkot - Trib.)

[xxx] Craig Elliffe, 'Interest Deductibility: Evaluating the Advantage of Earnings Stripping Regimes in Preventing Thin Capitalisation' (2017) 2017 NZ L Rev 257

[xxxi] Moody’s Investor Services, ‘Putting EBITDA In Perspective’, (2001) Moody’s Special Comment

[xxxii] Dirk Schindler & Hendrik Vrijburg, Hervorm de vpb door beperking van de renteaftrek, (2019) ESB 118–134 

[xxxiii] Thomas A. Gresik, Dirk Schindler, Guttorm Schjelderup, ‘Immobilizing corporate income shifting: Should it be safe to strip in the harbor?’, (2017) 152 Journal of Public Economics

[xxxiv] Dirk Schindler & Hendrik Vrijburg, Hervorm de vpb door beperking van de renteaftrek, (2019) ESB 118–134

[xxxv] Craig Elliffe, 'Interest Deductibility: Evaluating the Advantage of Earnings Stripping Regimes in Preventing Thin Capitalisation' (2017) 2017 NZ L Rev 257

[xxxvi] Ruud de Mooij and Li Liu, ‘At A Cost: The Real Effects of Thin Capitalization Rules’ (2021) IMF Working Paper

[xxxvii] Dirk Schindler & Hendrik Vrijburg, Hervorm de vpb door beperking van de renteaftrek, (2019) ESB 118–134 

[xxxviii] OECD, Limiting Base Erosion Involving Interest Deductions and Other Financial Payments, Action 4 - 2015 Final Report, (2015) Annexure B