Thin capitalization or earnings stripping rule?: An evolutionary and comparative analysis of the rules limiting the deduction of financial expenses and their approach in Peru

Authors

  • Raúl Alfredo Campos Ramírez PricewaterhouseCoopers Perú
  • José Julio Hernández Morales PricewaterhouseCoopers Perú

DOI:

https://doi.org/10.21678/forseti.v8i12.1356

Keywords:

Deduction, Financial expenses, Earnings stripping rules, OECD, Debt, EBITDA, Multinational groups, Thin capitalization, Loans, Interest, Anti-avoidance, Erosion, Tax base, Equity, BEPS, MNEs, Profit shifting, Ratio

Abstract

In 2018 one of the most important tax reforms in recent years took place. As part of this reform, the well-known thin capitalization regime stipulated in Article 37 of the Income Tax Law was modified. Therefore, in this paper, we aim to unravel the foundations and antecedents of this anti-avoidance rule, as well as its characteristics and shortcomings according to the legal and economic situation that the country is going through.

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Published

2020-08-06

How to Cite

Campos Ramírez, R. A., & Hernández Morales, J. J. (2020). Thin capitalization or earnings stripping rule?: An evolutionary and comparative analysis of the rules limiting the deduction of financial expenses and their approach in Peru. Forseti. Law Review, 8(12), 95–133. https://doi.org/10.21678/forseti.v8i12.1356

Issue

Vol. 8 No. 12 (2020): Forseti Nº 12

Section

Artí­culos