fbpx Interest Deductions in a Multijurisdictional World | Harvard Kennedy School

Additional Authors:

  • Mihir Desai

Excerpt

Interest Deductions in a Multijurisdictional World. Mihir Desai, April 2015, Paper. "This paper proposes and evaluates alternative methods for addressing the tax treatment of interest expenses in a multijurisdictional setting. The differential deductibility of debt entailed by various current tax law provisions leads to potential distortions in the patterns of asset ownership across MNCs and various proposed solutions have significant limitations. We suggest alternative regimes – a worldwide debt cap (WDC) and a net financing deduction (NFD) – to address the ownership distortions that we highlight along with other well-established problems of income-shifting through debt..." Link