OECD Updates BEPS Action 4 Report with Additional Guidance on the Design and Operation of the Group Ratio Rule and Banking and Insurance Sectors

On 22 December 2016, the OECD announced the release of an updated version of the BEPS Action 4 Report (Limiting Base Erosion Involving Interest Deductions and Other Financial Payments). The update provides additional guidance on two areas:

• The design and operation of the group ratio rule - The 2015 Action 4 Report set out a common approach to address BEPS involving interest and payments economically equivalent to interest. This included a 'fixed ratio rule' which limits an entity's net inte…