The Limitation of Interest Deduction and the Tax Treatment of Groups: Time for a Change in Portugal?
Journal
Country
International; Portugal
Published Date
Issue
Bulletin for International Taxation 2025 (Volume 79), No. 9/10
Document
Council Directive 2016/1164 (ATAD) states that if a taxpayer is a member of a group, then it may be given the right to fully deduct interest expenses if its ratio of equity over total assets is equal to, or higher than, the equivalent ratio of the group. The Portuguese limitation rule does not provide this option, relying instead on an EBITDA-based clause. This article advocates for a change.