On May 07, 2026, the Legislative Assembly approved a new authentic interpretation of Article 28 of the Income Tax Law, in order to provide legal certainty to taxpayers regarding the deductibility of costs and expenses. This legislative decision seeks to avoid interpretative gaps, defining that the following are deductible as necessary and business-related costs and expenses: (i) shrinkage, losses or expenses evidenced in the taxpayer’s accounting records; (ii) with real and reasonable costs; and (iii) even when no tax payable is derived from the taxable income for the fiscal year.
In this way, the new framework simplifies the burden of proof by establishing that shrinkage and losses, especially in strategic sectors such as industry, trade in perishable goods, textiles, the electricity and hydrocarbons sector, must be evidenced through the taxpayer’s own documentation and accounting records, rather than being recognized exclusively by regulatory entities. Likewise, another of the important changes with respect to the previous interpretation is that the admissibility of these costs (real and reasonable) is not subject to the existence of a tax computed in the fiscal year, which protects technical deductibility even in loss scenarios.
Finally, Legislative Decree No. 345 dated May 29, 2019, is expressly repealed, replacing it with this new framework, which is definitive in nature. This decree shall enter into force eight days after its publication in the Official Gazette, empowering the General Directorate of Internal Taxes to issue, among others, guidelines and administrative resolutions that facilitate the criteria for the “correct and adequate application of this authentic interpretation.”
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