Updating tax losses in income tax

Abstract

This paper provides a comprehensive review of the current legal framework governing the
inflation adjustment of accumulated tax losses deductible under the Income Tax regime. It
highlights the interpretative divergence between the Tax Authority and taxpayers regarding the applicability of such adjustments. The analysis includes relevant administrative and judicial precedents supporting each of the opposing positions. Furthermore considering recent audit procedures and formal notices issued by the Tax Authority, the article examines the
implementation of the existing payment facilitation plan as a mechanism to rectify or resolve discrepancies, and assesses its implications within the context of the applicable penalty system.