By Pino Stravalli

The loss carry back rule allows an eligible company to obtain a refundable tax offset for losses that have been incurred in the 2019-2020 to 2022-2023 financial years. The 30 June 2023 financial year is the final year in which this offset can be claimed therefore it is a company’s final opportunity to recoup some previous tax liabilities.

The tax offset is limited to the tax paid in relation to a previous income year up to the 30 June 2019 financial year but is capped at the amount of the franking surplus in a company’s franking account at the end of the financial year the claim is made.

Eligible companies can obtain the offset by choosing to carry back losses in an income year against an income tax liability from a previous year. The offset is claimed in the income year that the loss is incurred and used to carry back. Therefore, the tax rate used is the company rate of the income year in which the loss is incurred.

There are requirements in order to be eligible for the offset which include:

  1. Lodgement obligations need to be up to date,
  2. Cannot carry back a capital loss,
  3. Can only carry back a loss as far as the 30 June 2019 financial year,
  4. Any loss carried back reduces the company’s carried forward loss from previous financial years.

Please contact your DFK Benjamin King Money representative to see if you can take advantage of the above loss carry back rules in the 30 June 2023 financial year.