PIK Interest - Tax Deductible?
Have a question regarding SHL: Is PIK Interest on a shareholder loan fully tax-deductible in Europe? Thanks Guys!
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Tamara_S European_PEMonkey
Yes, but its typically taxable (dry) income for the recipient of the interest. IRS always gets paid.
What if a tax exempt entity like a uni endowment fund did a direct pik or leveraged loan into a sponsor deal?
That's fair. They'd still receive the income (K-1? Not sure), but they don't pay tax on it.
Interesting not trying to contradict you just curious about some schemes they could run to boost returns
Fiscal legislation is country specific. No general EU rule applies. Most countries have interest dedution limitations in Europe these days, based on absolute and relative amount of interest and/or based on gearing of the company.
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