What is the treatment of disallowed Interest expenditure?
Any Net Interest Expenditure exceeding 30% of a Taxable Person’s adjusted earnings before Interest, taxes, depreciation, and amortization (EBITDA) for a given Tax Period, and thus ineligible for deduction in that period, can be carried forward and employed in the subsequent 10 Tax Periods. These carried-forward amounts must be utilized in the order they were initially disallowed as deductions to diminish the Taxable Person’s Taxable Income.
However, it is crucial to note that this is contingent upon the condition that in a future Tax Period, where the Taxable Person intends to claim the deduction, their Net Interest Expenditure is less than 30% of their adjusted EBITDA for that specific Tax Period.
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