Carry back Losses – don’t miss out and start planning!
Under new laws introduced by the Government, companies with turnover of less than $5 billion are allowed to carry back losses from FY20, FY21 and FY22 years to offset previously taxed profits made in or after the 2019 Financial Year.
The tax refund will be available on election by eligible companies when they lodge their tax returns for the 2021 and 2022 income years. Note that, companies that do not elect to carry back losses under this measure can still carry losses forward as normal.
The loss carry back applies only to tax losses and not capital losses.
Big takeaway from this announcement is that if your company has tax losses or expecting to have tax losses incurred for the FY20, FY21 or FY22 income years, some pre planning may be necessary. This would include franking account projections and projecting your company’s tax loss position to determine the availability of the loss carry back.
Consideration should also be given to whether the Government’s immediate asset write off concessions can be used to create tax losses in FY21 and FY22 which can then also be carried back under the new rules.
So don’t miss out on this opportunity and come speak to our advisors at Atodaka to know more about this!
