On Monday, 14 June, the European Commission published its roadmap for drafting a directive (Debt-Equity Bias Reduction Allowance or DEBRA) expected in the first half of 2022. This initiative aims to encourage companies to finance their investments through equity contributions instead of resorting to debt, as announced in its May communication on business taxation (see EUROPE B12720A15).
Many corporate tax systems in the EU actually encourage debt financing by allowing interest...