Profits Tax / Currency Transactions

(Tax News Reporter - Two Weeks Ended 4 June 1996)

It has been reported that the State Tax Service is considering amending a recent letter on the taxation of currency transactions (see Tax News Reporter of 15 May 1996), following pressure from the bank lobby. According to this letter, losses incurred in trading foreign currency at rates different from the Central Bank rate are no longer tax-deductible, whilst profits remain taxable. The letter also instructs tax inspectorates to recalculate profits tax on this basis for 1994 and 1995. The contents of the proposed amendment are not yet known.

Legal developments are usually reported in Tax News Reporter on official publication. This may be long after the law is issued.