Calculator for including interest in the tax base
The taxable amount includes interest payments in proportion to the extent to which the average amount of debt liabilities (on which interest payments have been calculated) for the year under review exceeds an amount equal to four times the amount of the taxpayer’s equity as shown in the company’s annual accounts (at the beginning of the year under review), less any revaluation reserve for long-term investments and other reserves not arising from profit distributions.
The attached calculator makes it easy to calculate the allowable interest as well as the proportion of interest to be included in the taxable base for corporation tax purposes. By doing the following:
(1) First calculate the interest payable per year and enter into the calculator
(2) Determine the amount of equity (at the beginning of the accounting year) less any reserves not arising from profit distributions
(3) Determine the average indebtedness for the year. The average annual indebtedness calculator will help you to do this.
Use the calculator below to work out your average annual indebtedness:
(1) Enter the outstanding balance as at 31 December of the previous year
(2) Enter the increase or decrease in the liability for each month.
(3) The result is automatically calculated at the top of the calculator.
If there are several debts, each calculation must be done separately and then the results added together.
This is not the only calculator we have developed, there are others available.
