European Commission proposes tax incentive for equity
On 11 May 2022, the European Commission published a proposal for a new Council Directive that aims to encourage businesses to attract equity funding instead of debt. The proposal introduces an additional interest deductibility limitation (on top of the existing earnings-stripping rules) and allows taxpayers to deduct an allowance based on equity increases. These rules are envisaged to come into effect as of 1 January 2024.
Source: European Commission