Temporary loss carry back for eligible companies

Temporary loss carry back for eligible companies

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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

  1. The tax refund will be available on election by eligible companies when they lodge their tax returns for the 2021 & 2022 income years.
  2. Alternatively, companies can carry their losses forward as normal.

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