Taxation (International and Other Provisions) Act 2010 section 416

Group-EBITDA

Section 416 explains how to calculate the "group-EBITDA" of a worldwide group for a period of account, which is a key measure used in the corporate interest restriction rules.

• Group-EBITDA is calculated as the group's profit before tax, plus its net group-interest expense, plus a depreciation and amortisation adjustment — any of which may be negative
• Profit before tax is determined from the group's consolidated financial statements by taking total income (excluding tax income) and deducting total expenses (excluding tax expense), using the amounts recognised as items of profit or loss
• R&D expenditure credits under Chapter 1A of Part 13 of CTA 2009 are excluded from the profit before tax calculation
• The depreciation and amortisation adjustment is the sum of three components: a capital expenditure adjustment, a capital fair value movement adjustment, and a capital disposals adjustment

---