Income Tax Act Article 39

Losses incurred in the operation of business in previous years shall not be included in the computation of taxable income for the current year. However, in the case of a profit-seeking enterprise organized as a company that keeps a complete set of account books and evidential documents, uses the Blue Returns as provided in Article 77, or the account books of which have been audited and attested to by a certified public accountant, both for the years such losses occurred and for the years to which the losses are carried over, and then files annual income tax return within the prescribed period, taxation may be made on its net income after the deduction of losses incurred in the preceding ten years as verified and determined by the competent tax authority.If losses incurred before the implementation of the amendment of this Act on January 6, 2009, by a profit-seeking enterprise organized as a company conforming to the requirements set out in the proviso of the preceding Paragraph, as verified and determined by the tax authority have not been deducted completely according to the Act before January 6, 2009, the amended provision applies to the remaining losses.