Thin capitalization rules

Journal
Câmara, F. de Sousa da; Fernandes, J. Almeida
International Transfer Pricing Journal 2007 (Volume 14), No. 2
PriceUSD 45

In 1996, Portugal introduced thin capitalization provisions that would deny the deductibility of interest if the debt:equity ratio of the borrowing company exceeded 2:1. This article describes the Portuguese thin capitalization rules, their development over time and how they relate to EC Treaty law.