Financial Services Ireland


ATAD interest limitation rules

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Feedback Statement

On 23 December 2020, the Department of Finance published a Feedback Statement on the implementation of the EU Anti-Tax Avoidance Directive (“EU ATAD”) Interest Limitation Rules.


The EU ATAD requires Member States to implement a fixed ratio rule, designed to limit the ability of entities to deduct for tax purposes net borrowing costs in a given year to a maximum of 30% of Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA).


  • The purpose of the Feedback Statement is to set out possible approaches to some of the technical aspects of these rules which will be implemented in Ireland effective from 1 January 2022.
  • The Department of Finance are actively engaging in a consultation process in relation to the implementation of these rules and are accepting consultation responses on this Feedback Statement until 8 March 2021. A second Feedback Statement will be issued in mid-2021 which will focus more on the group mechanics and also the interaction of these rules with current Irish provisions regarding interest.
  • These rules may have a significant impact for the financial services sector and progress on implementation of these rules should be closely monitored.

Next Steps

  • The Feedback Statement welcomes responses/input as part of the consultation process.
  • EY are engaged in on-going discussions with Revenue and the Department of Finance on these new rules and will be actively engaging in the consultation process. We will be reaching out to our clients to discuss the specifics of the Feedback Statement in more detail as part of that process.


The Feedback Statement outlines the following timeline in relation to the consultation process and implementation of interest limitation rules:

  • 8 March 2021: Deadline for submissions / responses on the first feedback statement.
  • Mid 2021: Second feedback statement released by Department of Finance on the interest limitation rules.
  • Finance Bill 2021: Final legislation.
  • To take affect: 1 January 2022.

Thought Leaders

Aidan Walsh

FSO Ireland Tax Lead

Sinéad Colreavy

FS Partner, Tax and EY FS Ireland People Partner

Petrina Smyth

FS Partner, Business Tax Advisory

Ciarán Conroy

FS Partner, Business Tax Advisory