Counteracting Tax Avoidance Based on Financial Techniques: Do Thin Capitalization and Anti-Hybrid Rules Really Deal with the Underlying Problem?

Abstract

The author delves into the reasons that explain why financing has become a very potent tax planning tool and critically assesses whether the measures adopted (for example, thin capitalization and anti-hybrid rules) have been effective in counteracting tax avoidance practices based on financial techniques. The author raises questions with regard to whether these measures only tackle the symptoms rather than the principal underlying problem.