On the 11th of July 2019, the Commissioner for Revenue updated its guidelines on the NID rules. The updated guidelines include a new paragraph ‘xi’ which refer to deductions calculated in respect of accounting periods which are longer or shorter than twelve months.
The updated guidelines state that in order to further approximate the neutrality between debt and equity financing, an adjustment shall be applied to the NID in respect of accounting periods that are longer or shorter than twelve months. The NID for such periods is to be inflated or reduced by multiplying the NID by the number of days in the accounting period and dividing the result by 365. This new paragraph (xi) shall be applicable with effect from year of assessment 2020.
