Matthew Hodkin (Norton Rose Fulbright) considers some enlightening detail on a new proposal to introduce a wider exemption than first contemplated by the consultation process.
The consultation on the restriction of deductibility of corporate interest expense has since its inception included reference to a possible ‘public benefit infrastructure exemption’. This is an option permitted as part of the OECD BEPS action plan on interest deductibility and allows states to take certain public benefit infrastructure projects outside the restrictions on interest deductibility.
During the consultation process this emerged as an important feature of the regime as infrastructure projects tend to be long-term highly-leveraged and finely-tuned financially. This means that projects that have been subject to project financing (such as PFI and PPP projects) are particularly susceptible to the impact of the interest deductibility rules.
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Matthew Hodkin (Norton Rose Fulbright) considers some enlightening detail on a new proposal to introduce a wider exemption than first contemplated by the consultation process.
The consultation on the restriction of deductibility of corporate interest expense has since its inception included reference to a possible ‘public benefit infrastructure exemption’. This is an option permitted as part of the OECD BEPS action plan on interest deductibility and allows states to take certain public benefit infrastructure projects outside the restrictions on interest deductibility.
During the consultation process this emerged as an important feature of the regime as infrastructure projects tend to be long-term highly-leveraged and finely-tuned financially. This means that projects that have been subject to project financing (such as PFI and PPP projects) are particularly susceptible to the impact of the interest deductibility rules.
Public...
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