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Loss carry back tax offset
(Photo by Michael Longmire on Unsplash)
Eligibility for the tax offset
You must meet the eligibility requirements to choose to carry back the loss and claim the tax offset.
You can claim the tax offset if you:
- are an eligible entity
- made tax losses in the 2019–20, 2020–21 or 2021–22 income years
- had an income tax liability for the 2018–19, 2019–20 or 2020–21 income years
- have a surplus in your franking account at the end of the income year that you are claiming the tax offset
- have met your tax return lodgment obligations.
You are an eligible corporate entity if you are both a:
- company, corporate limited partnership or a public trading trust throughout
- the income year that you are claiming the tax offset
- the income year you choose to carry the loss back to (ignoring any part of the year before you existed)
- any income years in between
- small business entity in the loss year or would have been a small business entity if the aggregated turnover threshold was $5 billion.
The rules for calculating aggregated turnover are the same as those used for the small business entity concessions. Your aggregated turnover may include the annual turnover of other business entities, in addition to your own annual turnover.
You can only carry back tax losses made in the 2019–20, 2020–21 or 2021–22 income years.
You can only use a tax loss once.
You cannot carry back:
- capital losses
- certain tax losses arising from the conversion of excess franking offsets
- transferred losses relating to either
- foreign banking groups (Division 170 of the Income Tax Assessment Act 1997 (ITAA 1997))
- head companies of consolidated groups (Subdivision 707-A of the ITAA 1997).
How to claim the tax offset
You cannot claim the tax offset in your Company tax return 2020 for a tax loss made in the 2019–20 income year. You will be able to claim the tax offset in your Company tax return 2021 or Company tax return 2022.
Claiming the tax offset is optional. To the extent you choose not to carry back the losses, you may be able to carry them forward to a future income year.
If you want to claim the tax offset for an income year, you will need to make the loss carry back choice by the time you lodge your company tax return for that year. When making the choice, you will also need to specify the amount of tax loss you choose to carry back.