Half the rich world's governments allow their citizens to deduct the interest payments on mortgages from their taxable income; almost all countries allow firms to write off payments on their borrowing against taxable earnings.
As for taxes, the issue as to whether banks can write off their payments will be decided on a case-by-case basis by the Internal Revenue Service, lawyers involved in the negotiations said.
Douglas M. Steenland, the president of Northwest Airlines, said that although an airline has certain operational advantages under Chapter 11 protection, like the ability to write off debt payments, "the decision-making is more cumbersome as you have to deal with creditors, and you have to conduct more of your business in the public eye".
This usually allows the business to order articles on a piece work basis and write off the payments as business expenses.
Through a combination of write-offs, payments and allowances, that debt has been whittled to $2.1 million, an amount the company said it could not exceed without harming profits.
study cited above goes into some detail on how it's done, but the general idea is to create a system that allows companies to treat a certain percentage of their profits as a "payment to equity," which means they can write them off just as other companies write off their debt payments.
Suppose a taxpayer makes $150,000 a year and writes off $75,000 in interest payments and $15,000 in real estate deductions.
Acer said in June it would take a $150m£90m0m) charge to write off inventory and doubtful payments in Europe and will cut 300 jobs there.
Until 1997 French companies could write off under-the-table payments to foreign officials; only in 2000 was bribery made illegal.
Landlords can take them to court for non-payment or write off the arrears on a case-by-case basis.
