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European Commission proposes Directive to tackle debt-equity bias in taxation

|Tax Alerts, Legislation & Policy, Na ...|European Union
European Union

Executive summary

On 11 May 2022, the European Commission (the Commission) published a legislative proposal on the Debt-equity bias reduction allowance (DEBRA) initiative. The proposal sets forth rules to address the tax-related asymmetry in treatment of debt and equity, with the aim to encourage companies to finance their investment through equity contributions rather than through debt financing (…

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