LOSS CARRY BACK – TAX OFFSET

Loss carry back provides a refundable tax offset that eligible corporate entities can claim in their financial year ended 2021 and 2022 company tax returns. Eligible entities get the offset by choosing to carry back losses to earlier years in which there were income tax liabilities. The entity does not need to amend the earlier income years to claim the offset. Claiming the tax offset is optional. If the entity does not choose to carry back a loss, the loss may be carried forward to use in a later income year.

Eligibility for the tax offset:

1. 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.

2.  You have made tax losses in the financial years ended 2020, 2021 and 2022.

  • You can only carry back tax losses made in the above years
  • You can only use a tax loss once
  • You cannot carry back:
  • Capital losses
  • Certain tax losses arising from conversion of excess franking offsets
  • Transferred losses relating either to foreign banking groups or head companies of consolidated groups.

3. You must both:

  • Lodge your tax return for that income year and
  • Have lodged returns for the previous five income years.

If you have not lodged for any of those income years, you may still be able to claim the tax offset if for those years, either:

  • ATO assessed your income tax liability
  • you were not required to lodge a tax return.

Check your eligibility

Tax Liability in the income yearTax loss made in 2018-19 or prior income years Tax loss made in 2019-20 income yearTax loss made in 2020-21 income yearTax loss made in 2021-22 income year
2018-19n/aCan carry the 2019-20 loss back to the 2018-19 income yearCan carry the 2020-21 loss back to the 2018-19 income yearCan carry the 2021-22 loss back to the 2018-19 income year
2019-20Not eligible n/aCan carry the 2020-21 loss back to the 2019-20 income yearCan carry the 2021-22 loss back to the 2019-20 income year
2020-21Not eligibleNot eligiblen/aCan carry the 2021-22 loss back to the 2020-21 income year

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