The EACB appreciates the fact that credit institutions - as defined in Art. 4(1)(1) of the Regulation (EU) 575/2013 (CRR) - are explicitly excluded from the scope of the draft directive on laying down rules on a Debt-Equity Bias Reduction Allowance (DEBRA) and on limiting the deductibility of interest for corporate income tax (CIT) purposes. However, we would like to point out to a number of issues that need to be further clarified.
In reference to the Article 2 stating that the directive would apply to all “taxpayers” that are subjected to the CIT in one or several member states, we would appreciate a clarification on whether the DEBRA rules for consolidated groups would apply on a taxpayer basis. In addition, if the consolidated tax group is considered as one taxpayer and since the entities are prudentially consolidated for regulatory law purposes, we also think it would be necessary to clarify that - if the main/parent entity is a financial undertaking - all entities of the consolidated group are out of scope for DEBRA.
As regards leasing activities, the request of the EACB members would be to:
1. include lease companies in the exemption for financial undertakings even when there is no banking license required for leasing activities;
2. in case lease companies are not exempted, explicitly confirm that the interest components included in the operational lease income are to be recognized as interest for calculating the net interest position.