8- The previous tax on distributable profits was 15% (plus 5% payable upon the payment of dividends on bearer shares not deposited with a credit institution). The new law expressly establishes that additional shares issued as a result of the capitalization of reserves or of profits shall not be considered as dividends in kind for purposes of this tax and, therefore, this tax shall not be payable on the issuance of such additional shares, except when, upon liquidation, the partner or stock-holder obtains an excess over his investment, or if the capital is reduced by redemption of stock. When there is a reduction of capital or a liquidation of the company, it is understood that the reduction or liquidation affects first the capitalized reserves, on which the related tax must be paid. It is important that all those companies that have unappropri- ated profits earned, through December 31, 1964, on which the previous tax on distributable profits has been paid (or will be paid), control such profits in general ledger accounts separate from those relating to profits obtained beginning January 1, 1965, since the former will not be subject to a tax at the time of distribution, whereas the latter will be. The previous tax on distributable profits, at the 15% rate, will be payable if capital reserves or reserves capitalized, as to which the previous tax has not been paid, are distributed. In previous years, in order to defer the payment of the tax on distributable profits, it was necessary for companies to obtain authorization from the Treasury Department, segregating the related undistributed profits in a reinvestment reserve account which remained subject to the payment of the tax when such profits were distributed as cash- dividends. The Treasury Department did not always grant such authorization or, as happened recently, the authorization was granted for amounts lower than those requested. With the new tax such au-thorization will no longer be necessary since the tax will not be payable until there is an actual distribution of dividends. The new law establishes that companies may request authoriza- tion for reinvestment of profits for the fiscal year ended December 31, 1964, or a proportional part when the fiscal year includes part of 1964 and part of 1965. It should be noted that under the new provisions, accumulated losses will be automatically deducted for purposes of this tax: com-panies with losses will not distribute subsequent profits until the losses have been absorbed, and the tax will be paid only upon dis- tribution of the net accumulated profits. 3. Elimination of tax on imputed interest: The text of the new law no longer gives the Treasury Depart-ment the right to assess a tax on imputed interest at 6% annually on loans or other credits which do not stipulate interest or which stipulate an interest rate lower than 6% annually; the previous law contained such a provision.