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Table 8. SME Survey Response to the Questionnaire: The Tax Treatment of Business Losses Country The Tax Treatment of Business Losses Albania Algeria Argentina Benin Bolivia Brazil Chile China Colombia Kenya Peru Trinidad and Tobago Vietnam For incorporated businesses: losses carried forward up to 3 years. In case of small businesses: losses can’t be transferred. Losses carried forward up to 5 years. Losses carried forward up to 4 years. Losses carried forward up to 3 years. Losses carried forward up to 4 years. Those taxpayers declaring under the presumptive system (SIMPLES) do not have business losses to deduct given they pay taxes as a certain percentage of their turnover (i.e., there is no calculation of net profit/loss). So this is different from those declaring under the real system, where there this calculation takes place. If there is a business loss, it can be carried forward without time limit, but there is a limitation on the amount of the compensation. Losses carried forward indefinitely. Losses carried forward up to 5 years. Losses carried forward up to 8 years. Business losses cannot be carried backwards. However they can be carried forward indefinitely. Losses carried forward up to 4 years. Losses carried forward indefinitely. Losses carried forward up to 5 years. Source: Countries authorities.
Table 9. SME Survey Response to the Questionnaire: Taxes on Capital Gains Country 18. How do you treat Capital Gains on the Sale of a Small Businesses? Albania Algeria Argentina Benin Bolivia Brazil Chile China Legislation on tax doesn’t treat the sale of a small business. The sale of small business assets is treated as revenues from selling and these incomes are taxed. Short term (- 3 years): 35% abatement; Long term (+ 3 years): 70% abatement. Capital gains are treated under the income tax. The capital gains on the sale of a small business are subject to the tax on business profits (BIC). Capital gains are treated under the income tax. Capital gains are treated under the income tax. Capital gains are treated under the income tax. China currently has no capital gains tax. Therefore, the relevant provisions of the enterprise income tax apply to incorporated enterprise capital gains obtained from the sale of a small enterprise currently under development, and enterprise income tax is levied against capital gains as well as income from production and operations. Colombia Kenya Peru Trinidad and Tobago Vietnam Capital gains are treated under the income tax. Currently there is no capital gains tax since its suspension in 1985. However, with effect from January 2007, the tax will be re-introduced. Implementation modalities are being worked out. Capital gains are treated under the income tax. No different. Only short term capital gains chargeable to income tax. In small businesses, capital gains will be put under category of other incomes to calculate income tax of the business. Source: Countries authorities.
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