Below, we explain the measures against profit tax evasion set out in the Income Tax Act and result from Council Directive (EU) 2016/1164 (Anti-Tax Avoidance Directive, ATAD) and Council Directive (EU) 2017/952 (ATAD2).
Handbook “Specifications upon taxation with income tax”
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Examples of taxation of the surplus borrowing cost
Example 1
The company's profit before depreciation is 20 million euros, surplus borrowing cost is 10 million euros, and the company's net loss is 5 million euros.
The surplus borrowing cost exceeds the threshold of 3 million euros by 7 million and is 4 million euros higher than 30% of the company's profit before depreciation.
Since 4 million euros does not exceed the company's net loss (5 million euros), the company does not have a tax liability.
Example 2
The company's profit before depreciation is 20 million euros, interest expense is 10 million euros, depreciation is 15 million euros, and the company's net loss is 3 million euros.
The interest expense exceeds the threshold of 3 million euros by 7 million and is 4 million euros higher than 30% of the company's profit before depreciation.
Since 4 million euros exceeds the net loss (3 million euros) by 1 million euros, the obligation to pay income tax on 1 million euros arises.
Last updated on 08.01.2025
Last updated: 13.11.2025