Thin capitalization – deductibility limit for interest on foreign currency loans reduced

On 15 April 2010, the Official Gazette No. 239 published Government Decision No. 296/2010, amending, with retrospective effect from 1 January 2010, the Methodological Norms for the application of the Tax Code.

The Decision decreases from 8% to 6% the maximum interest rate on foreign currency loans granted by legal entities other than financial institutions.

One of the impacts of this reduction is that the limitation on the deductibility of interest, for …