3. Changes affecting companies

3.1 Temporary loss carry back for eligible companies

The Government has announced that it will introduce measures to allow companies with a turnover of less than $5 billion to carry back losses from the 2020, 2021 or 2022 income years to offset previously taxed profits made in or after the 2019 income year.

This will allow such companies to generate a refundable tax offset in the year in which the loss is made. The tax refund is limited by requiring that the amount carried back is not more than the earlier taxed profits and that the carry back does not generate a franking account deficit.  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.