DEBRA: a crossroad between equity and debt

In order to encourage companies to finance themselves with equity rather than debt, last May 11th the European Commission presented the so-called DEBRA Directive Proposal, providing for a notional interest deduction on equity increases and a further limitation to the deduction of interest expenses on borrowings. In the document attached we discuss the open points left by the Proposal and the main differences between such proposed tax regime and the one Italian taxpayers can already benefit from since 2011.