Tax Breaks: when the Punishment Is Not for Evading, but for Investing

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In Argentina, the combination of high inflation, indebtedness and regulatory rigidities generates an absurd fiscal situation: companies that had losses end up being taxed on profits as if they had had profits. The reason is that, due to a restrictive interpretation in force, accumulated losses are not allowed to be updated by inflation, while debts are adjusted by inflation. This especially impacts indebted companies, which see taxed non-existen…