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A taxpayer has inquired whether being ordered to pay legal costs and statutory interest can be treated as a capital loss. The Directorate General of Taxes (DGT) has ruled that both concepts represent a change in the composition of assets, allowing them to be recorded as a loss.
This ruling clarifies that expenses arising from legal proceedings, specifically court costs and interest, can be used to offset capital gains in the personal income tax return.
The tax team reviews your specific situation.
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