Cover -- IBFD Doctoral Series -- Title -- Copyright -- Acknowledgements -- Abstract -- List of Abbreviations, Definitions and Acronyms -- Chapter 1: Introduction -- 1.1. Background -- 1.2. The research questions -- 1.3. Research method: The comparative method -- 1.4. Aims and outline of the study -- Chapter 2: The Tax Treatment of Interest and the Evolution of the Thin Capitalization Rules -- 2.1. Introduction -- 2.2. Financing a business: Debt and equity capital -- 2.2.1. Tax treatment -- 2.2.2. Allocation of taxing powers -- 2.2.2.1. Taxing cross-border interest
2.2.2.2. Solutions devised in the League of Nations draft conventions to avoid double taxation of interest -- 2.2.2.2.1. 1927 Draft Model Convention for the prevention of double taxation -- 2.2.2.2.2. 1928 Draft Bilateral Conventions for the prevention of double taxation in the special matter of direct taxes -- 2.2.2.2.3. The Mexico and London Draft Conventions -- 2.2.2.2.3.1. The Mexico Draft Convention -- 2.2.2.2.3.2. The London Draft Convention -- 2.2.2.2.3.3. The way forward -- 2.2.2.3. OECD Model Conventions -- 2.2.2.3.1. 1963 OECD Model Convention (the "1963 OECD MC")
2.2.2.3.2. 1977 OECD Model Convention (the "1977 OECD MC") -- 2.2.2.3.3. The subsequent updates to the OECD Model Convention (the "OECD MC") -- 2.2.2.3.4. The Commentary to the OECD MC -- 2.2.2.4. US Model Convention (the "US MC") -- 2.2.2.5. UN Model Convention (the "UN MC") -- 2.2.2.6. Interest and Royalties Directive -- 2.2.2.7. General comments -- 2.2.3. Thin capitalization -- 2.2.3.1. Introductory remarks -- 2.2.3.2. The different kinds of thin capitalization rules -- 2.2.3.2.1. First kind of thin capitalization rules: Thin capitalization rules based on general tax principles
2.2.3.2.1.1. General anti-avoidance legislation -- 2.2.3.2.1.2. Substance-over-form principle and abuse of law concept -- 2.2.3.2.1.3. General application of the arm's length principle (the "ALP") -- 2.2.3.2.2. Second kind of thin capitalization rules: Specific thin capitalization rules -- 2.2.3.2.3. Comments on the different kinds of thin capitalization rules -- 2.2.3.3. The evolution of thin capitalization rules -- 2.2.3.3.1. Introductory remarks -- 2.2.3.3.2. Earnings stripping rules -- 2.2.3.3.3. Comprehensive Interest Barriers
2.2.3.4. Concluding remarks on the different types of thin capitalization rules or interest limitation rules -- 2.2.3.5. Problems caused by the application of thin capitalization rules -- 2.3. Concluding remarks -- Chapter 3: Comprehensive Interest Barriers -- 3.1. Introduction -- 3.2. Analysis of the selected Comprehensive Interest Barriers -- 3.2.1. New Zealand -- 3.2.1.1. Policy objectives -- 3.2.1.2. Scope -- 3.2.1.2.1. International aspect -- 3.2.1.2.2. Material aspect -- 3.2.1.3. Mechanics -- 3.2.1.4. Consequences -- 3.2.2. Australia -- 3.2.2.1. Policy objectives -- 3.2.2.2. Scope
Summary
This book investigates the impact of thin capitalization rules and proposes an international capitalization standard to determine the adequate (i.e. arm's length) capital structure of an entity
