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Interest Deductibility

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The Interest Limitation Pile-On

As Congress contemplates adding a new worldwide interest limitation rule as part of the House Build Back Better Act, it is useful to consider the potential effects of this proposal as well as whether it is necessary to add this on top of the U.S.’s existing restrictions on the value of interest deductions.

International tax rules, International Tax rules House Democrats' covid-19 relief proposal

An “Interest”ing Tax Hike in the COVID-19 Relief Proposal

As the House Ways and Means Committee continues working on the latest round of fiscal relief amid the pandemic, one curious provision in the legislation is a tax hike on multinational companies. One section of the legislation would repeal a provision in current law that allows U.S. multinationals to choose to allocate their interest costs on a worldwide basis (more on that in a moment).

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Conference Report Limits on Interest Deductions

There is no good reason to eliminate interest deductions to permit expensing. Expensing is a key element of any tax system which seeks to put all economic activity on a level playing field.