Introduction

What's new?

Company loss carry back

In the 2012 Budget, the government announced its intention to provide tax relief for companies by allowing them to carry back tax losses so they receive a refund against tax previously paid.

Tax losses incurred by a company can be carried forward and deducted against income derived in later income years, or in certain circumstances, carried back against the income tax liability it had for either of the two preceding income years to obtain a refundable tax offset.

A transitional one year carry back period applies for 2012-13. You can read item 13 Loss carry back in the Company tax return instructions 2013 for more information.

If the company has claimed a loss carry back tax offset, ensure the amount of tax losses chosen to be carried back is not included in tax losses carried forward to later income years.

Who must complete a losses schedule?

If any of the following tests apply to your entity (company, trust or superannuation fund), you must complete and submit a losses schedule with your 2013 tax return.

A losses schedule is required if the entity:	Company	Trust	Fund
has total of tax losses and net capital losses greater than $100,000 carried forward to later income years	√	√	√
is required by section 165-13 of the Income Tax Assessment Act 1997 (ITAA 1997) to satisfy the same business test in Subdivision 165-E of that Act to apply a loss either in the 2012-13 income year or in a later income year or, having passed the continuity of ownership test, has claimed a deduction for tax losses and/or applied net capital losses greater than $100,000	√
is a listed widely-held trust that is required by section 266-125 of Schedule 2F to the Income Tax Assessment Act 1936 (ITAA 1936) to satisfy the same business test in Subdivision 269-F of that Schedule to deduct a tax loss in the 2012-13 or later income years or, having passed the 50% stake test, has claimed a deduction for tax losses greater than $100,000		√
has a changeover time that occurred after 1.00pm by legal time in the Australian Capital Territory on 11 November 1999 and determined that it has an unrealised net loss as defined in the provisions of Subdivision 165-CC of the ITAA 1997	√
is a life insurance company and has either a complying superannuation/first home saver account (FHSA) class tax loss or a complying superannuation/FHSA net capital loss greater than $100,000 carried forward to later income years	√	√
has foreign loss component of tax losses deducted in the 2012-13 income year or carried forward to later income years	√	√	√
has an interest in a controlled foreign company (CFC) that has 2012-13 losses greater than $100,000	√	√	√
has an interest in a CFC that has deducted or carried forward a loss greater than $100,000 to later income years.	√	√	√
has chosen to carry back tax losses greater than $100,000 in 2012-13.	√

An entity may need to complete a losses schedule for certain aspects of its net capital losses. While some of the information requested in the losses schedule is also requested in the Capital gains tax (CGT) schedule 2013 (CGT schedule), an entity that completes a losses schedule may also need to complete a CGT schedule.

If the entity completes a losses schedule in respect of any aspect of its losses, all relevant parts of the schedule must be completed. For example, if the entity completes a schedule as a result of having a foreign loss component of tax losses and has both tax losses and net capital losses carried forward to later income years, details of such losses are required even if the total of these losses is not
greater than $100,000.

An entity that has joined a consolidated group as a subsidiary member during the income year must lodge a losses schedule covering any non-membership period if the entity satisfies any of the requirements for lodgment of that schedule, including where losses exceed $100,000 at the end of the non-membership period. The amounts at part A of the losses schedule must be transferred to U and V item 13 on the Company tax return 2013.