Prof. Dr Hans van den Hurk

DEBRA, you are so beautiful

 “You are so beautiful’ was a famous song from Joe Cocker. When DEBRA (the draft Debt-Equity Bias Reduction Allowance-directive) arrived many tax lawyers responded very positively. At last, a directive which offers enterprises something positive instead of taking away benefits. The question is, however, will this new baby grow up to be a very beautiful person or will she remain known as an ugly example of European legislation which should have been rejected years ago. What is it about? The European Commission is proposing a directive that will allow companies throughout the European Union to take a notional interest deduction on their equity. Who wouldn’t want that? From many updates from the various tax law firms and big four, I read that DEBRA is received with a lot of warmth. The European Commission is bringing something instead of further tightening the rules for companies. But read carefully what is proposed and think about the consequences! In any case, I can reveal already that it does not make me happy.”

Source: Kluwer International Tax Blog.