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Law No. 58-FZ of 6 June 2005 amending the corporate income tax section of the Tax Code was published in the Official Gazette of 14 June 2005. From 2007, a full offset of previous losses against profits will be introduced (currently, a 30% per year limitation applies and a 50% limitation is established for 2006); — Orbitax Tax News & Alerts

Furthermore, the law, provides for amendments of the thin capitalization rules, which will apply as from 1 January 2006. The amendments to the thin capitalization rules include the following:

-   to calculate the amount of deductible interest, interbank rate (as established by the Central Bank) effective at the time when the loan was given should be used in respect of loans with a fixed interest rate. With respect to loans which do not have a fixed interest rate, the interbank rate effective on the date when interest is deductible for CIT purposes must be used;
thin capitalization rules may apply also in case of financing via a resident legal entity affiliated with a non-resident creditor, or if a non-resident creditor or affiliated resident legal entity provides a guarantee in respect of the loan;
-   excess interest will be treated as a dividend distribution irrespective of whether the interest is actually paid or not; and
-   the higher debt/equity ratio of 12:5 applicable to financial lease activities will continue to apply only to enterprises carrying on exclusively financial leasing activities.