Temporary loss carry back for eligible companies
On 11 May 2021, as part of the 2021–22 federal Budget, the Australian Government announced it will extend the loss carry back measure.
Companies can carry back losses from 2020, 2021 & 2022 income years to offset previously taxed profits made in or after the 2019 income year. This allows companies to generate a refundable tax offset in the year in which the loss is made.
The tax refund is limited to the amount of earlier taxed profits. Also, the carryback cannot generate a franking account deficit.
Implementation Process and Costs
- The tax refund will be available on election by eligible companies when they lodge their tax returns for the 2021 & 2022 income years.
- Alternatively, companies can carry their losses forward as normal.
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