Did your business make an income tax loss in 2020? You may be eligible for the loss carry back tax offset in this financial year. Get in touch to see if your business qualifies and how to best use this refundable offset to generate cash flow.
As part of the Federal Budget 2020-21, the government announced a loss carry back measure to encourage new investment and work with the temporary asset expensing measures also announced at the budget.
The new law started on 1 January 2021.
Eligible corporate entities that previously had an income tax liability in a relevant year, and have subsequent losses, can claim a refundable tax offset up to the amount of their previous liability.
The measure allows significant tax losses, which may then be carried back to generate cash refunds for eligible businesses.
Who is Eligible?
There are specific guidelines about eligibility, integrity, and tax offset calculation. We can talk to you about whether you can use the loss carry back measure to benefit your business.
You can only claim the tax loss once, in either the 2021 or 2022 financial year, so it’s important to get advice about how and when to apply this measure for your business. To claim the tax offset, the ATO must be notified before lodging the company tax return that year.