Taxation (International and Other Provisions) Act 2010 section 407

Amounts not brought into account in determining a company's tax-EBITDA

Section 407 identifies the specific types of amounts that must be excluded when calculating a company's tax-EBITDA under the corporate interest restriction rules.

• Interest-related income and expenses, capital allowances, and certain intangible asset debits and credits are all stripped out of the tax-EBITDA calculation, reflecting the "EBITDA" concept of measuring earnings before interest, tax, depreciation and amortisation.
• Losses, loan relationship deficits, and management expenses carried forward or back from other accounting periods are excluded, so that tax-EBITDA reflects only the current period's trading performance.
• Group relief deductions and certain transitional reliefs are excluded to the extent they represent losses of the worldwide group, preventing double-counting across group members.
• A wide range of special tax reliefs — including R&D credits, creative industry reliefs, contaminated land remediation, patent box deductions, and charitable donations — are treated as excluded "qualifying tax reliefs" so they do not inflate or distort the tax-EBITDA figure.

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