The Finance Law for 2016 (Law No. 15/021) was passed on 31 December 2015 and entered into force on 1 January 2016. Please find below the most relevant tax measure for 2016:
Corporate Income Tax (“Impôt sur les Bénéfices et Profits” – IBP)
The Finance Law for 2015 had repealed (i) the taxpayer’s obligation to obtain an authorization from the Tax Administration prior to offsetting losses carried forward, as well as (ii) the 5-year time limit to carry forward such losses, thus allowing for indefinite offsetting. In return, it limited such offsetting to 70% of the profit realized before deduction of the losses carried forward.
The newly enacted Finance Law for 2016 increases said offsetting limitation by reducing the amount allowed for offsetting from 70% down to 60% of the profit before deduction of the losses carried forward.
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