The Sunsetting of the Loss Carry Back Tax Offset
- Arnold Shields
- May 26, 2023
- 2 min read
Updated: May 15
As part of its economic recovery efforts, the Australian Government introduced the Loss Carry Back Tax Offset, offering much-needed relief to struggling businesses. But this support measure is ending with the 2022–23 financial year. If your business incurred losses in the last few years, this may be your last chance to unlock cash refunds by offsetting those losses against tax paid in previous profitable years.
What is the Loss Carry Back Tax Offset?
The Loss Carry Back Tax Offset allows eligible companies to claim a refund for previously paid income tax by applying losses from the 2019–20, 2020–21, 2021–22, or 2022–23 years against earlier profits.
Traditionally, losses could only be carried forward. This offset, however, brings relief forward—improving business cash flow during tough trading conditions, such as those experienced during the pandemic.
Are You Eligible?
To claim the tax offset, your business must meet the following ATO criteria:
✔ Eligible Entity Types:
Companies
Corporate Limited Partnerships
Public Trading Trusts
❌ Sole traders, individuals, and standard partnerships are not eligible.
✔ Current-Year Tax Loss:
Your business must have a negative taxable income in any of the eligible years.
✔ Past-Year Profits:
You can only carry losses back to profitable years—the amount claimed is limited to your previous tax liabilities.
✔ Lodgment Compliance:
All relevant tax returns and statements must be up to date.
What You Need to Provide
To claim the Loss Carry Back Tax Offset, your 2020–21, 2021–22 or 2022–23 Company Tax Return must include specific information:
Opening and Closing Franking Account Balances
Aggregated Turnover for each loss year
Amount of Losses to Carry Back
Tax Liabilities for Carried Back Years
Unutilised Net Exempt Income (e.g. COVID-19 government grants)
Important: You must ensure prior year tax liabilities are paid before 30 June 2023, to access franking credits needed to claim the offset.
Why It Matters
This is a final opportunity for eligible companies to recover previously paid tax and boost their cash position. With the scheme ending in 2023, action must be taken before EOFY.
Need Help?
Don’t leave potential refunds on the table. Contact Dolman Bateman on (02) 9411 5422 or book an appointment with one of our experienced accountants. We’ll assess your eligibility, assist with your tax return, and ensure you maximise any available tax benefits before it’s too late.
Disclaimer:
The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. While every effort has been made to ensure the accuracy of this content at the time of publication, tax laws and regulations may change, and individual circumstances vary. Dolman Bateman accepts no responsibility or liability for any loss or damage incurred as a result of acting on or relying upon any of the information contained herein. You should seek professional advice tailored to your specific situation before making any financial or tax decision.
