The Luxembourg Administration of Direct Tax has published an updated version of Circular L.I.R. n° 168bis/1 dated 28 July 2021, which replaces the prior version dated 2 June 2021. The Circular concerns the application of the interest deduction limitation rules implemented in line with the EU Anti-Tax Avoidance Directive (ATAD) with effect from 1 January 2019. Under the interest deduction limitation rules, the deduction of net interest expense (borrowing costs) is limited to 30% of EBITDA or a EUR 3 million safe harbor. The latest version of the Circular provides expanded guidance in relation to the safeguard (equity escape) clause...