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By François MASQUELIER, CEO of Simply Treasury
DEBRA, a new acronym that could cause nightmares for tax managers but also for corporate treasurers. It is a new proposal from the EU that could have significant impacts to consider, although its objectives are laudable and logical. The idea is not new to encourage companies to increase their capitalization and reduce their bank debt (partly through more recourse to the capital market - CMU project). As always, the best can very quickly become the enemy of the good. It is certainly a proposal to be followed and monitored to ensure that it does not penalize indebted companies too much.
DEBRA Proposal («Debt-Equity Bias Reduction Allowance)
In early May, the...
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