Tax break for
2004-2008 accounts

Carry over losses
extended by three years

The Ministry of Finance issued a decision that extends the loss carryforward deadlines. Companies will benefit from additional years to transfer the losses they registered between 2004 and 2008.

“This decision gives tax credit to companies that suffered from bad economic conditions during these years,” said Jacques Saade, Managing Partner at Mazars, a Beirut-based company specialized in audit, accountancy, tax, legal and advisory services.

The decision covers four categories of taxpayers. The first is for companies that incurred losses in 2003 and 2004 and who will have one additional year to do the loss carryforward of each of these two years.

The second category includes companies that have been destroyed by the Israeli war between 12 July and 14 August 2006 and have incurred losses during 2005-2008. The loss carryforward of these companies is extended to ten years after the loss.

The third category includes all companies that have incurred losses during 2005-2008, with a loss carryforward of seven years.
The fourth category includes companies that registered losses due to direct damages of fixed assets resulting from terrorist activities or Israeli attacks between 2005 and 2008. These losses should be considered as costs to be deducted from profits and can be subject to the loss carryforward, according to the above mentioned second and third categories.

Beneficiaries from the decision are individuals, companies, and money companies that submitted the annual declaration and data of the above mentioned years and later years to the tax administration of the Ministry of Finance, before the issuance of this law, or that stopped working but continued to submit their annual declaration since they were not canceled from the commercial registry or concerned syndicates, or that stopped working without any auditing control by the Ministry’s tax administration.

Non beneficiaries are taxpayers that have stopped working before this law has become effective, while their business was subject to the Ministry’s auditing control and they were not requested to submit a tax declaration.

Taxpayers may begin submitting applications to benefit from the decision to the tax administration at the Ministry of Finance, by the end of June 2015.

The decision is the implementation of a law issued by the Government in April. “The Ministry of Finance is too late in issuing this decision, since many taxpayers have already benefited from the law by submitting their 2013 tax declaration through auditors or tax declaration software,” said Saade. “The issuance of the Ministry’s decision should usually occur one to two months following the adoption of the law,” said Saade.