(Extract from Tax News Reporter - Week ended 15 May 1996)
Losses incurred in buying and selling foreign currencies for rates that differ from the Central Bank rate are not deductible for profits tax purposes. Losses incurred on short term currency operations with the aim of hedging are only deductible to the extent of income from the same type of transaction. Any losses incurred on "foreign currency purchase-sale transactions" generally is not deductible at all, whilst profit would still be taxable. All tax inspectors are instructed to perform a recalculation of profits tax liabilities for the years 1994 and 1995 without applying penalties.
Letter of the State Tax Service of the RF of 27 March 1996 No. NP-4-05/26n, agreed with the Ministry of Finance
This publication is intended for general guidance only and should not form the basis of specific decisions.
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