Hello everyone. Welcome to this PWC Taxbyte podcast.

Today we will talk about a new development, fresh development, a commission proposal to tackle the debt equity bias in taxation.

My name is Peter Bedre and I'm very happy that I can welcome

in my still virtual recording studio,

Jean-Philippe van West,

a senior legal counsel in our team

who closely monitors all European developments

and David Ludhue, Belgian partner,

but also leading the financial transactions

trans-p trans pricing network of

PWC so welcome David and welcome Jean-Philippe an important proposal again and upon

initiative of the European Commission a proposal to tackle the debt equity bias in

taxation what I want to explore with you today is a little bit what we can expect,

what is on the table, what we can expect in terms of impact and which are the typical companies

that would be impacted by this proposal. So to start with the first one, Jean-Philippe,

can you elaborate a bit? What does this directive try solve and and why is it on the table

today yes of course people yes of course peter happy to to provide an overview here and

and some background on the directive or a proposal so as we all know so when investments are financed, we need, our finance, we need money.

And there, you can have two options, either debt financing or equity financing.

And if we look at the tax treatment, well, interests are normally tax deductible.

However, equity financing, so the dividend distributions are not tax deductible. However, equity financing, so the dividend distributions are not

tax deductible. So from a tax perspective, debt financing is favored. And it is especially this

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