Introduction A company is typically financed (or capitalised) through debt and/or equity. Thin capitalisation refers to the situation in which a company is financed through a relatively high level of debt compared to equity levels. Thin capitalisation occurs where a business/ entity/ company has been funded to an extent where the debt is not in proportion to the equity of the business/entity/company, to the extent to that its debt far exceeds its equity with the result that s