Interest Deductibility : Implementation of BEPS Action 4 and the Future of Transfer Pricing of Intragroup Finance

This article considers multinational enterprises' capacity to deduct interest expenses in light of the implementation of Action 4 of the OECD/G20 Base Erosion and Profit Shifting Project and the OECD's current work on transfer pricing of financial transactions. It concludes that there has been a “step change” in moving away from a traditional “arm's length” approach, and makes predictions about the tax planning responses to existing and upcoming interest limitation rules, and possible counter-responses