You cannot claim the tax offset in your 2019–2020 company tax return. You will be able to claim the tax offset in your 2020–2021 or 2021–2022 company tax return.
The Australian Taxation Office (ATO) are updating the 2020-2021 company tax return forms with additional loss carry back labels to be ready for 1 July 2021. They are working through how companies that lodge their 2020–2021 company tax return before 1 July 2021 can make a loss carry back claim.
Loss carry back is intended to interact with the temporary full expensing measure encouraging new investment which may result in tax losses. The choice to carry back tax losses may result in a tax refund which will increase business cash flow.
If you are an eligible corporate entity and you make a tax loss in the 2019–2020, 2020–2021 or 2021–2022 income years as a result of claiming an immediate deduction under the temporary full expensing measure, you can still claim a refundable tax offset.
Claiming the tax offset is optional. To the extent you choose not to carry back the losses, you may be able to carry them forward to a future income year. The amount of tax offset available is limited to your franking account surplus on the last day of the income year for which you claim it.
ELIGIBILITY
You must meet the eligibility requirements to choose to carry back the loss and claim the tax offset. You can claim the tax offset if you:
- are an eligible entity
- made tax losses in the 2019–2020, 2020–2021 or 2021–2022 income years
- were liable to pay income tax in the 2018–2019, 2019–2020 or 2020–2021 income years
- have a surplus in your franking account at the end of the income year that you are claiming the tax offset
- have met your income tax return lodgement obligations (lodge your income tax return for that income year and have lodged for the previous 5 income years).
LOSSES CAN ONLY BE USED ONCE
To the extent that you have carried back a tax loss, you can only use it once. This means you cannot carry the same tax loss back again or carry it forward to use it in a future income year. This includes any losses that have been used to reduce your exempt income.