Tax Services

What are the proposed excessive interest and financing expenses limitation (EIFEL) rules?

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The Department of Finance (Finance) introduced draft legislation earlier this year for EIFEL. It was initially proposed in Budget 2021, consistent with similar legislative steps taken by other G20 jurisdictions as an outcome of the international “Base Erosion and Profit Sharing” (BEPS) initiative.

Under EIFEL, the tax-deductible amount of “interest and financing expenses” (IFE) for certain corporations and trusts may be restricted as explained in the document below.

The rules are proposed to be effective for taxation years starting on or after January 1, 2023.

Finance announced its intention to release a further revised draft of EIFEL in response to public submissions received during the consultation period.

Stay tuned as we’ll be updating this page when more information is announced.

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