Waiving the right to use a tax loss in the future

Together with the new possibility to use retroactively a tax loss (which we noted in our last newsletter), taxpayers have the possibility to waive the right to use a tax loss as a deductible item in future periods. If taxpayers use this possibility, then they will not be subject to a five-year prolonged period in respect of possible tax inspections by the tax authorities (as has been the case until now); rather, the tax period can then be closed three years after the deadline for the submission of the tax return in question (general deadline for a tax inspection).

If taxpayers decide to use this possibility, they have to do it in the form of a written document issued before the expiry of the deadline for the tax return for the tax period in which the tax loss was recorded. ("Deadline" for the submission of a tax return means either the legal deadline or the deadline determined by the tax administrator, which is based on a prolongation request filed by the taxpayer.)

According to an opinion issued by the General Financial Directorate, waiving the right to use a tax loss in the future will not be possible if the assessment of the tax loss is based on a supplementary tax return. Moreover, the General Financial Directorate has determined that a taxpayer must file a document waiving the right to use a tax loss in the future - even if he/she has used the whole tax loss retroactively.