19- Taxpayers should analyze their reserves as of December 31, 1964, in order to segregate that portion which was deducted for tax purposes in previous years (one-tenth of 1% of net revenues) from that part which was not deducted. The latter can be retained on the books, if considered necessary, or cancelled either against accumulated profits of prior years or against current operating results, without in either case being taxable, since the charges in prior years were not deducted. The important point is that a careful analysis and segregation should be made, preferably in separate accounts in order to avoid confusion and problems in the future. 28. New deduction for creating or increasing funds for __pensions or retirement: The deduction of amounts set aside to create or increase funds (or "reserves" as they are referred to by the law) for pensions or retirement of personnel is only allowed if such provisions are based on actuarial calculations, if at least 30% is invested in Government bonds and the remainder in securities approved by the National Securities Commission or in workers' housing. The securities or property cannot be used except for the payment of pensions or retirement without payment of the tax at the maximum rate of 42%. Income from the above investments, which is applied to increase the fund for pensions or retirement, is not includable in the taxable income of the company. 29. Deduction of rent and __interest:_ Payments for rental of real estate and for interest are de-ductible provided that the real estate and the funds obtained from the loan are used for the specific purposes of the company. As was also established by the previous law, the Treasury Department has the right to limit the deduction for yearly rentals paid to 12% of the value of the real estate, based on an appraisal which can be requested from a credit institution. 30. Tax on occasional transactions: Under the new law, the profit obtained from occasional acts. of commerce is taxable at the progressive rates included in this memorandum as Exhibit A. Under the previous law, such profit was taxed at a fixed rate of 20%. The tax on occasional commissions continues at 20% on the gross commission, with no deductions. Similarly, the gross revenues of enterprises which exhibit to the public and which remain in one location for less than a month continue to be taxed at a fixed rate of 4%.