Iolanda Duarte Morais has written an article for the European Taxation Journal, published by the IBFD (International Bureau of Fiscal Documentation), entitled ‘Is the Portuguese DEBRA an Example to Follow?’.

In this article, the VdA lawyer examines the incentive regime for the capitalisation of companies, introduced into the Tax Benefits Statute by the 2023 State Budget and amended by subsequent budget laws.

The regime analysed is an anticipation of the transposition of the proposed DEBRA (Debt-Equity Bias Reduction Allowance) Directive, which aims to mitigate the impact that the tax regime has on debt-equity bias, i.e. the use of debt financing at the expense of equity. The successive changes to the regime have tried to reflect some of the criticisms levelled at the proposed Directive, and analysing its impacts is important both for the European Commission, which may amend the proposed Directive accordingly before it comes into force, and for the other countries, which may find it advantageous to introduce a regime similar to Portugal's in anticipation of the transposition of the proposed Directive.

• This article is available here.