Although the revised Finance Act does not legalise the tax authorities' unofficial position that companies may take a tax deduction upon the reclassification of portfolio securities, this position may still be asserted against the tax authorities. A directive 4 B-4-95 dated July 18, 1995 extends the time limit during which companies may effect such reclassifications up to October 31, 1995. The directive also covers reclassifications carried out in 1994 to correct accounting errors.
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