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Calculating the loss carry back offset (2021 Company tax return)

Key changes

As part of the 2020–21 Budget, the government announced temporary tax incentives to allow eligible corporate tax entities to offset tax losses against the previous year's income tax liabilities. See Loss carry back offset on the ATO's website.

Corporate entities can offset their tax losses against previous tax liabilities through a refundable tax offset. This will allow eligible corporate entities to offset their current tax losses immediately rather than carry them forward.  

Eligible corporate tax entities can claim the loss carry back tax offset by carrying back tax losses made in 2019–20, 2020–21 and 2021–22 years to a prior year's income tax liability in the 2018–19, 2019–20 and 2020–21 years.

An aggregated turnover threshold of less than $5billion in turnover in the loss year (or the income year before that year) applies.

Eligibility

Corporate tax entities with less than $5 billion aggregated turnover.

How much refundable offset can you claim?

The maximum refundable tax offset you can claim is the lower of the amount of income tax liability in the tax year you're carrying forward to and the closing franking account balance (Item 13 Label S) for the current year.