In cases where a loan is procured from a Related Party, the Interest associated with that loan becomes non-deductible if the loan is utilized to facilitate any of the following transactions:

1. Dividend or profit disbursement to a Related Party, such as distributing dividends to a parent company.
2. Redemption, repurchase, reduction, or return of share capital to a Related Party, including activities like share buyback operations.
3. Capital infusion into a Related Party, exemplified by an increase in investment in a subsidiary company.
4. Acquisition of an ownership stake in an entity that either is already or subsequently becomes a Related Party post-acquisition, such as obtaining shares in another company that becomes a subsidiary after the acquisition.

This limitation is enacted to curb profit shifting through financing arrangements among Related Parties. However, if the Taxable Person can demonstrate that the financing arrangement was not contrived to gain a Corporate Tax advantage, Interest expenses tied to that financing arrangement may still be deductible. It’s worth noting that if the Related Party is subject to Corporate Tax or a comparable tax rate not less than 9%, it will be presumed that no Corporate Tax advantage is being sought.