Interest deduction restrictions

Corporate income tax is subject to several interest deduction limitations. It’s therefore important to regularly assess whether interest expenses can still be deducted from your taxable profits, as these rules can significantly impact your tax position. We’re happy to review this with you to determine whether it applies to your business.

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Interest deduction restrictions

Interest deduction restrictions

When interest is deducted from taxable profits, it can have a significant impact on your tax position. We’d be happy to assess with you whether this applies to your business.

Interest deduction limitations may apply in situations such as:

Business acquisition
Entry of a new employee
Private equity investment
Dividend distribution

Ellen Punte Senior belastingadviseur

Causes

Under certain legal provisions, the deduction of interest for corporate income tax purposes may be limited. These restrictions may apply in cases involving:

Fiscal reclassification of debt as equity
Loans deemed anti-profit shifting
Low-interest, long-term loans
The generic earnings stripping rule
Hybrid loans

These rules can become particularly complex when structuring loans or dealing with international tax matters. We’ll help you identify opportunities and assess potential risks.

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It’s essential to regularly assess whether interest is still deductible and to what extent limitations apply. We’re here to guide you, and together we’ll take steps toward a successful future!

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