Is there a CFC or Thin Cap regime?

Tax

Cyprus Small Flag Cyprus

There are no CFC or thin capitalisation provisions under Cyprus law.

Greece Small Flag Greece

Greek CFCs rules

The New Income Tax Code (Law 4172/2013 hereinafter “ITC”) introduced in Greek Tax legislation provisions pertinent to Controlled Foreign Corporation Rules (“CFCs rules”).

Pursuant to Article 66 ITC, taxable income shall include the non-distributed income of a legal person or legal entity (which is tax resident in another country) provided all the following conditions are met:

a) The taxable person, on his own or together with related parties, directly or indirectly holds shares, units, voting rights or holdings in the capital over 50% or is entitled to collect more than 50% of the profits of the said legal person or legal entity.

b) The said legal person or legal entity is taxable in a non-cooperating state or state with a preferential tax regime, namely a special regime which allows a materially lower level of tax than the general regime.

c) More than 30% of the net income before tax generated by the legal person or legal entity falls within one or more of the categories specified in paragraph 3.

d) It is not a company whose main class of shares is traded on a regulated market.

The above shall not apply to cases where the legal person or legal entity is a tax resident of a Member State of the European Union or a tax resident of a country which is a party to the EEA Agreement, unless the legal person or legal entity’s establishment or economic activities are an artificial arrangement devised for the real purpose of avoiding the corresponding tax.

The categories of income which shall be taken into account for the purpose of applying the aforementioned, provided that more than 50% of the corresponding category of income of the legal person or legal entity comes from transactions with the taxable company or its related parties, are the following:

a) interest or any other income generated by financial assets,

b) royalties or other income generated by intellectual property,

c) dividends and income from the transfer of shares,

d) income from moveable assets,

e) income from real estate property unless the taxable legal person or legal entity’s State would not be entitled to tax the income based on an agreement which has been concluded with the third country,

f) income from insurance, banking or other financial activities.

The above categories of income shall be calculated based on the tax year and at the tax rate which applies to profits from the business activities of natural persons (Article 29 ITC) or at the tax rate which applies to profits from the business activities of legal persons or legal entities (Article 58 ITC), whichever is appropriate.

Thin Capitalisation rules
The provisions of Article 49 of the Greek Income Tax Code (Law 4172/2013), as in force introduced thin capitalisation rules to combat abuses. These rules are in accordance with international practice and the guidance set out in the Resolution of the Council of the European Union of 8 June 2010 on coordination of the Controlled Foreign Corporation (CFC) and thin capitalisation rules within the European Union (2010/C156/01).

The provisions of paragraph 1 of that Article state that without prejudice to paragraph 3, interest expenses are not recognised as deductible business expenses to the extent that surplus interest expenses are over 30% of the taxable EBITDA. EBITDA is set based on the financial statements prepared in accordance with the Greek accounting rules using tax adjustments specified in the Greek Income Tax Code (ITC), in other words after adjusting the business’ accounting results in line with the provisions of the ITC (Law 4172/2013).

For the purposes of implementing this Article, interest has the meaning given to it in Article 37(1) of Law 4172/2013.

Under the provisions of Article 72(9)(a) of Law 4172/2013, which were inserted by Article 26(3) of Law 4223/2013, the rate of 30% of EBITDA applies to interest expenses incurred in tax years commencing from 1.1.2017 onwards. In the transitional period (i.e. tax years which commence from 1.1.2014 up to 31.12.2016) the following EBITDA rates apply:

60% for tax years commencing from 1.1.2014.

50% for tax years commencing from 1.1.2015.

40% for tax years commencing from 1.1.2016.

Paragraph 2 states that the term ‘surplus interest expenses’ means a surplus of interest expenses compared to interest income.

Interest expenses means all interest the business pays in any tax year, whether relating to loans received from an affiliated or other company, or from a credit institution, from corporate bonds, etc. It is understood that interest expenses do not include loan expenses. To give effect to this Article, interest expenses do not include any capitalised interest. Likewise, interest income includes all income from interest, irrespective of the cause, which the business earns in any tax year.

Paragraph 3 states that the interest expenses referred to in paragraph 1, i.e. surplus interest expenses exceeding 30% of EBITDA, are fully recognised as deductible business expenses, provided the amount of net interest expenses entered in the accounting books does not exceed € 3,000,000 a year.

The provisions of Article 72(9) (b) of Law 4172/2013, as in force, state that the above threshold of € 3,000,000 applies to interest expenses incurred in tax years commencing from 1.1.2016 onwards. In the transitional period (i.e. tax years which commence from 1.1.2014 up to 31.12.2015) the threshold for interest expenses is € 5,000,000.

Consequently, when interest expenses are below the threshold applicable in each case (€ 3,000,000 or € 5,000,000 respectively), they are deductible from the business’ gross income, subject however to the provisions of Article 23(a) of that same Law which state that interest from loans the business receives from third parties, other than bank loans, inter-bank loans and bond loans issued by companies, are not deductible from the business’ gross income, to the extent that they exceed the interest which would arise if the interest rate were equal to the interest rate on open account loans to non-financial businesses, as set in the Bank of Greece’s Bulletin of Conjunctural Indicators for the nearest time period prior to the date of borrowing.

It is clear from these points that in tax years which commence in the period from 1.1.2014 to 31.12.2014, the non-deductible amount is the positive amount resulting from the formula below, when interest expenses exceed € 5,000,000: [Interest expenses – Interest income] – 60% x EBITDA

Likewise, in subsequent tax years, using the same formula, the following percentage rates x EBITDA and interest expenses thresholds are to be used:

50% x EBITDA and an interest expenses threshold of € 5,000,000 for tax years commencing in the period from 1.1.2015 to 31.12.2015.

40% x EBITDA and an interest expenses threshold of € 3,000,000 for tax years commencing in the period from 1.1.2016 to 31.12.2016.

30% x EBITDA and an interest expenses threshold of € 3,000,000 for tax years commencing in the period from 1.1.2017 onwards.

Paragraph 4 states that all interest expenses not deducted in accordance with paragraph 1 of this Article are to be carried forward, without time restrictions, to be deducted [in the future] from the business’ gross income.

To give effect to this paragraph, the public administration accepts in Circular 1037/2015 that the non-deducted amount of interest expenses in each tax year must be carried forward to subsequent tax years in which the surplus interest expenses are below the relevant percentage of EBITDA, as applicable from time to time. Note that the amount carried forward in each tax year cannot exceed the amount which arises from the percentage of EBITDA applicable for that same tax year, less the surplus interest expenses for that year, given that the percentage of EBITDA is the maximum permissible amount of interest expenses deductible in any given year.

Turkey Small Flag Turkey

Yes.

United Kingdom Small Flag United Kingdom

The UK CFC regime is based on rules designed to prevent diversion of UK profits to low tax territories. Where UK profits are diverted to a CFC, those profits are apportioned and charged on a UK corporate interest-holder that holds at least a 25% interest in the CFC. There are a number of exemptions to reflect the fact that the majority of CFCs are established for genuine commercial reasons.

The Finance Act 2004 abolished the separate thin capitalisation requirements that had existed previously and subsumed them within the general transfer pricing rules in the Taxation (International and Other Provisions) Act 2010 (TIOPA 2010).

Mexico Small Flag Mexico

Concerning CFC rules, the Mexican Income Tax Law establishes that Mexican residents for tax purposes and foreign residents with a permanent establishment in Mexico could be deemed to perceive income from jurisdictions considered as preferential tax regimes whenever: (i) income deriving therefrom is not subject to taxation in the relevant jurisdiction; or (ii) the income tax to which said income is subject to in the relevant jurisdiction is less than 75% of the income tax that would be due in Mexico.

In this regard, Mexican residents for tax purposes or foreign residents with a permanent establishment within national territory could be required to pay income tax in terms of Title VI of the Mexican Income Tax Law (Preferential tax regimes and multinationals) over income perceived through foreign legal entities in which they participate, directly or indirectly (in proportion to their participation therein), as well as over income perceived by means of foreign legal entities deemed as tax transparent.

In general terms, taxpayers that receive income considered as subject to a preferential tax regimes are required to keep specific accounting records concerning each of the legal entities through which they perceive income, and to pay income tax due separating it from the rest of their accruable income.

Additionally, thin capitalisation rules are considered in terms of the Mexican tax laws. In this sense, Mexican resident legal entities are only entitled to deduct interest payments as long as the total amount of debt contracted (for which such payments are due) does not exceed three times the company’s net worth. Should the relevant entity fail to abide by the allowed debt-to-net equity ratio, the corresponding interest payments would be considered as non-deductible for income tax purposes.

Nonetheless, legal entities considered as part of specific industries, such as the financial system or other national strategic sectors, could obtain an authorisation from the relevant tax authorities in order to be permitted to have a higher debt-to-net equity ratio.

Furthermore, it is of paramount importance to point out that Mexico, as part of the G20, has been actively participating in the development and implementation of OECD guidelines in several subjects including CFC and thin capitalisation rules, to the extent of amending the local set of laws. Therefore, for the past recent years, more stringent requirements have gradually been incorporated to the Mexican tax system.

Gibraltar Small Flag Gibraltar

Thin cap regime.

Japan Small Flag Japan

Yes for both.

(1) As for the CFC rule, Japanese tax law has “anti-tax haven” rules, or a Japanese version of the CFC rules. If the Japanese CFC rules apply, the Japanese corporation that is a shareholder of the CFC will be taxed upon its pro rata share of certain adjusted income of the CFC. In general, Japanese CFC rules apply if (i) Japanese resident individuals and Japanese corporations collectively own directly or indirectly more than 50% of the total issued shares, voting rights or rights to receive dividends of a foreign corporation; (ii) a particular Japanese resident individual or a Japanese corporation (which is the subject taxpayer) owns directly or indirectly 10% or more of the total issued shares, voting rights or rights to receive dividends of that foreign corporation; and (iii) the effective income tax burden (rather than the face or nominal tax rate) of that foreign corporation in a given fiscal year is less than 20%. Typical examples include Cayman Islands, Hong Kong and Singapore subsidiaries. It should be noted that tax-exempt income and gains in the foreign jurisdiction will lower the effective income tax burden; for example, if a Dutch subsidiary of a Japanese corporation is exempt from substantial amount of capital gains by the Dutch participation exemption, the effective income tax burden in that fiscal year could be less than 20%, despite the Dutch statutory corporate tax rate of 25%. That will make the Dutch subsidiary a CFC for that fiscal year. However, exemption of dividends received by the Dutch subsidiary from foreign companies by the participation exemption will not lower the effective income tax burden (this treatment is only limited to dividends).

Even if the Japanese CFC rules apply because the conditions explained above are met, there is an active business exception. That is, if the CFC meets all of the following criteria, the Japanese CFC rules do not apply: (i) the principal business of the CFC is other than financial investments in shares, bonds or IPs or leasing of vessels or aircrafts, (ii) the CFC is managed and administered on its own within the jurisdiction of its incorporation, rather than from Japan, (iii) the CFC maintains physical fixed premises such as offices and factories within the jurisdiction of its incorporation that is necessary to do its business, and (iv) depending on the type of business, the CFC does business principally within the jurisdiction of its incorporation (e.g., manufacturing) or deals with unrelated third parties to account for 50% or more of the total business transactions (e.g., distribution, transportation).

In addition, the recent annual tax reform has expanded the exception to a certain qualifying regional headquarters or intermediate holding company; that is, if a foreign subsidiary incorporated in the Asian-hub low-tax countries such as Singapore and Hong Kong operates as an Asian regional headquarters or as an intermediate holding company for the Japanese parent corporation, subject to certain requirements being met, the Japanese CFC rules do not treat that Singapore or Hong Kong company as a CFC and do not tax the Japanese parent corporation by the Japanese CFC rules.

It should be noted that Japan plans an overhaul of the CFC regime by the forthcoming 2017 annual tax reform, in response to the BEPS action plan 3. The details will only be available around February 2017.

(2) As to a thin cap regime or limitation on interest deduction, there are special rules limiting deductibility of interest as follows:

If the debt giving rise to the interest is owed to a foreign corporation, which is a controlling shareholder (owning directly or indirectly 50% or more of the total shares) of the Japanese corporation, the ‘thin capitalization’ rules apply, and, generally speaking, interest payable upon the portion of the debt exceeding three times the shareholders’ equity of the Japanese corporation will be nondeductible. The ‘thin capitalization’ rules apply not only in the case of direct financing by the controlling shareholder, but also in other similar cases, such as financing by third parties with a guarantee provided by the controlling shareholder.

Transfer pricing rules also apply to interest payable to affiliated foreign corporations of the Japanese corporation in order to require that the interest rate be arm’s length (i.e., the portion of the interest exceeding the arm’s-length rate will be denied deduction). One Japanese court precedent indicates that the arm’s-length interest rate generally refers to the rate available in the market for substantially similar finance transactions.

Further, as a result of the 2012 annual tax reform, a Japanese version of the ‘earnings stripping’ rules has been introduced, and applies from fiscal years beginning on or after April 1, 2013. There, if the ‘net’ amount of the interest paid to certain foreign related parties of the Japanese corporation in a fiscal year exceeds 50% of certain ‘adjusted income’ (substantially equal to EBITDA, i.e., taxable income before that interest deduction, depreciation, etc.) of that Japanese corporation in that fiscal year (i.e., interest paid to foreign affiliates is excessive as compared to the taxable income), the excess portion of the interest will not be deductible in that fiscal year. The excess portion will be carried forward for seven future fiscal years, however, and will be deductible to the extent the above conditions are met in the relevant future fiscal year. There is a certain de minimis exception, as well as an exception where the gross amount of interest paid to foreign related parties does not exceed 50% of the total gross amount of interest (including interest paid to third parties).

It should be noted that interest deduction can be denied, even if none of the foregoing regimes is applicable, if the Japanese tax authority considers the relevant debt transaction as avoiding Japanese tax and invokes the anti-avoidance statute in the corporation tax law.

United States Small Flag United States

The U.S. operates a CFC regime. Generally, a foreign corporation is a CFC if more than 50 percent of its value or voting power is held by one or more 10 percent voting U.S. shareholders. Under the Subpart F rules, certain income (including, in part, certain related party income, certain passive income, and certain oil and gas income) of a CFC is includible in its U.S. parent’s taxable income. In addition, a CFC’s investment in United States property is generally taxable to its 10 percent U.S. shareholders.
The U.S. also has thin capitalization rules under Section 163(j) that apply to U.S. companies and foreign companies engaged in a U.S. trade or business. Generally, if a company has a debt-to-equity ratio that exceeds 1.5 to 1, part of any interest paid to a related party that is not subject to U.S. tax may be not be deductible.

Under regulations published October 13, 2016, debt between certain related companies issued after January 1, 2018, must meet new documentation rules or the debt will be presumed to be equity. This rule does not apply to foreign issuers of debt. In addition, in certain instances debt instruments between related companies are automatically treated as equity.

Hong Kong Small Flag Hong Kong

There is no CFC and Thin Cap Regime in Hong Kong. However, the deduction of interest expenses in Hong Kong is generally restricted to interest paid to (i) a local or offshore financial institution, or (ii) an entity who is liable to tax in Hong Kong on the receipt of the interest.

Spain Small Flag Spain

Spain applies CFC rules in order to tax any income obtained by foreign companies located in low tax jurisdictions which are deemed not to carry out an entrepreneurial activity, as defined. No CFC rules are applicable when the foreign entity is resident in another EU Member State provided that it has been incorporated based on valid business reasons.

Thin capitalisation rules no longer exist. However, the Corporate Income Tax Act includes interest barrier rules that, as a general principle, deny the deductibility of interest expenses corresponding to net indebtedness exceeding 30% of the EBITDA in a given tax period.

Austria Small Flag Austria

Austria does not have "controlled foreign company" rules. This applies with the exception of the look through approach for investments in non-registered foreign investment funds.

There are no specific thin capitalisation rules, but, in accordance with case law, interest may be reclassified as a dividend in certain situations. The tax authorities usually accept a debt-equity ratio of 4:1 in tax audits, although this is not considered a safe harbour.

Germany Small Flag Germany

Yes, Germany operates a tight CFC regime and the interest barrier limits the deductibility of interest expenses.

Under the German CFC rules, income of a controlled foreign corporation is subject to taxation in Germany in the hands of the German shareholder if (and to the extent):

  • more than 50% of the shares in a foreign entity are (directly or indirectly) held by German tax residents (the threshold is reduced to 1% in the case of passive income with capital investment character);
  • the foreign entity derives income from activities other than certain privileged activities (i.e., passive income); and
  • this passive income is subject to low taxation in the foreign state (i.e., at a rate of less than 25%).

The German CFC-rules not only apply to foreign subsidiaries directly held by German taxpayers but also to lower tier companies. As a matter of principle, low taxed passive income generated by controlled foreign corporations that have their statutory seat or place of effective management in a member state of the EU/EEA shall not give rise to a CFC inclusion in Germany, if and to the extent the German resident shareholders demonstrate that such controlled foreign corporation pursues an actual economic activity with respect to the relevant income in the foreign EU/EEA member state and that the arm's length principle has been observed.

The deductibility of interest expenses in Germany is limited by the so-called interest barrier. Under this rule the net interest expense (interest expense less interest income) of a business is deductible only up to 30% of the Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) of the business as specifically calculated for tax purposes. This so called taxable EBITDA can deviate substantially from the EBITDA as determined under financial accounting (e.g. in case of tax exempt income, such as dividends, which are part of the financial EBITDA but not of the taxable EBITDA). Any interest expense that is not deductible under the interest barrier can be carried forward into future tax years, as can unused EBITDA-amounts (the latter up to five years only). There are several exemptions from the interest barrier rules, one of which applies for business with a net interest expense below EUR 3m in a tax year. The Federal Tax Court recently argued that the interest barrier is in violation of the German constitution and submitted this question to the Federal Constitutional Court for a final decision.

Belgium Small Flag Belgium

Until recently, Belgium did not have any specific CFC legislation. Belgium traditionally took the view that the application of CFC legislation was contrary to the provisions of Articles 5, 7 and 10 of the double tax treaties and made a clear reservation on this point in the OECD Commentary on the Model Convention. In 2015, Belgium introduced the so-called Cayman-tax allowing the tax authorities to tax the income of foreign low taxed entities directly at the level of the beneficiaries. However, these rules only apply to individuals. Hence, currently no specific CFC legislation is in force for corporate taxpayers. As an EU member state, Belgium must introduce the CFC-rules under the Anti-Tax Avoidance Directive by January 1st, 2019 at the latest.

Two rules on thin capitalization apply.

First, a 1:1 debt/equity ratio applies to loans granted by individual directors, shareholders and non-resident corporate directors to their company. Interest relating to debt in excess of this ratio is recharacterised as a non-deductible dividend. The interest rate can in any case not exceed the market rate.

Second, a 5:1 debt/equity ratio applies to debt if the creditor (resident or non-resident) is exempt or taxed at a reduced rate regarding the interest paid on the debt. Excess interest is considered a non-deductible business expense. The 5:1 debt/equity ratio also applies to intra-group loans. Equity is defined as the sum of the taxed reserves at the beginning of the accounting year and the paid-up capital at the end of the accounting year. Specific rules may apply, e.g. for financial companies or for group companies managing the cash pooling of the group.

As set out earlier, the ATAD, which must be transposed into Belgian law with effect from January 1st, 2019, will lead to the introduction of a new interest limitation rule.

Italy Small Flag Italy

Italian tax law provides for a Controlled Foreign Companies ("CFCs") regime. According to CFC regime, profits realised by a foreign company which is directly or indirectly controlled (as defined in Article 2359 of the Italian Civil Code) by an Italian resident company or individual are deemed for tax purposes as profits of the Italian controlling company or individual if the foreign company resides in a non-EU or non-EEA Country with which Italy did not sign an Exchange of Information Agreement and whose tax legislation provides a nominal corporate income tax rate lower than 50% of the nominal income tax rate applicable in Italy (the so called "Tax Haven Countries").

In addition, the CFC rule also applies when the non-resident entity is not located in a Tax Haven Country provided the following criteria are met:

  1. the non-resident entity is subject to an effective tax rate lower than 50% of the effective tax rate applicable in Italy; and
  2. more than 50% of the non-resident entity’s income arises from (i) passive income, or (ii) the provision of intercompany services.

Provided that certain conditions are met, the taxpayer can prevent the application of the CFC rules.

Italian tax legislation does not contain a Thin-Cap rule; however, limits on the deduction of interest expenses apply. Interest expenses are always deductible in an amount equal to the interest income received by the company. Any excess balance may only be deducted for tax purposes up to 30% of EBITDA. Interest expenses not deductible in any fiscal year as a result of exceeding the above threshold can be deducted in subsequent years without any time limit, provided that in those years the relevant current year interest expenses are less than 30% of the current EBITDA.

Moreover, the general rule on interest expense deduction provides that if the interest expense for a relevant year was lower than 30% of EBITDA, that part of EBITDA not used in such year for the purposes of deducting interest expenses can be carried forward so as to increase the following year’s EBITDA (thus increasing the amount of interest expenses able to be deducted).

Starting from 2017, no limits will apply in relation to the deduction of interest expenses to companies operating in the financial industry.

Malaysia Small Flag Malaysia

Yes, whereby via Section 140A(4) of the Income Tax Act 1967, Malaysia has introduced a thin capitalisation regime in 2009. However, this provision was suspended indefinitely by the Minister of Finance.

Ireland Small Flag Ireland

Ireland does not have any CFC or Thin Capitalisation rules.

France Small Flag France

The FTC provides for a CFC rule that constitutes an exception to the above-mentioned territoriality principle. According to this rule, profits realized by an entity, which is, directly or indirectly, more than 50%, owned by a French company and which is located in a privileged tax regime country, are deemed to be received by the French company in due proportion of the shares owned and therefore, are to be taxed in France. An entity is considered to be located in a privileged tax regime country if the effective corporate tax rate applied in this country is at least 50% lower than France’s.

The French thin cap regime provides that the deductibility of interest paid by a French company to related parties is limited if the following criteria are cumulatively met:

  • the overall indebtedness regarding loans granted by related parties exceeds 1.5 times the company’s net equity;
  • the amount of interest paid to related parties exceeds 25% of the adjusted
  • the amount of interest paid to related parties exceeds the amount of interest received from related parties.

The portion of interest paid which exceeds the highest of the three set criteria is not deductible.

French tax law provides for several other rules aiming at limiting the deductibility of interest:

  • the rate applied to the inter-company loan must not exceed a specific tax rate (which is an average of the rates set for loans granted to companies by financial institutions). If so, the exceeding portion of interest paid is not deductible;
  • “Carrez Amendment”, which provides that interest on loans raised for the purpose of acquiring shares is non-deductible if the decisions concerning the acquired shares are not actually made in France;
  • “Charasse Amendment”, which provides for financial expenses paid on related-party acquisitions to be added back, to a certain extent, within the context of a French tax group; and
  • a global limitation corresponding to 25% of interest expenses, known as the “Rabot”.

Australia Small Flag Australia

Australia operates both a CFC and a Thin Cap regime.

Broadly, the CFC regime will tax Australian residents ('attributable taxpayers') on their share of the income (including capital gains) of foreign entities in which they hold a controlling interest. The tax treatment will apply even in circumstances where that 'share' has not been distributed to the attributable taxpayer.

The thin capitalisation rules impose a debt to equity limit of 60:40, subject to certain limited exceptions (eg for genuine securitisation vehicles). The rules will disallow deductions for the outgoings (interest) associated with the debt instruments in excess of that limit.

Switzerland Small Flag Switzerland

Switzerland does not operate a CFC regime. However, according to federal supreme court jurisprudence, profits of companies formally domiciled abroad with little or no local substance that are effectively managed in Switzerland may be subject to Swiss federal/cantonal corporate income tax.

Swiss federal and cantonal corporate income tax rules provide for thin cap safe harbour rules (or, more precisely, a max debt rule per asset class) as follows:

Cash 100%
Accounts receivable 85%
Inventory 85%
Other current assets 85%
Bonds in CHF 90%
Bonds in foreign currency 80%
Quoted shares 60%
Non-quoted shares 50%
Investments in subsidiaries 70%
Loans 85%
Furniture and Equipment 50%
Property, plant (commercially used) 70%
Other real-estate 80%
Intellectual property rights 70%

For finance companies, the maximum debt allowed is 6/7 of total assets.

In addition, the Swiss federal tax administration publishes annually safe harbour maximum interest rates applicable on related party lending.

Interest paid on amounts of debt exceeding the maximum debt allowed and / or interest rates exceeding the safe harbour interest rates are requalified as a hidden dividend if paid to a shareholder or related party. As a consequence, such interest is not a deductible expense for federal/cantonal corporate income tax purposes and is subject to Swiss withholding tax at a rate of 35% (subject to reduction under and applicable double taxation treaty).

However, the rules set out above are safe harbour rules and permit the tax payer to prove that different arm's length debt-to-equity ratio and interest rates apply.

Updated: March 10, 2017