OECD Issues Public Discussion Draft on the Group Ratio Rule under BEPS Action 4

On 11 July 2016, the OECD issued a public discussion draft on follow up work for BEPS Action 4 (Limiting Base Erosion Involving Interest Deductions and Other Financial Payments). The draft concerns the design and operation of the group ratio rule, with a focus on:

• Approaches to calculate a group’s net third party interest expense;
• A definition of group-EBITDA; and
• Approaches to deal with the impact of losses on the operation of the group ratio rule.

The purpose of the group ratio rule is t…