Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS  

Division 175 - Use of a company ' s tax losses or deductions to avoid income tax  

Subdivision 175-A - Tax benefits from unused tax losses  

SECTION 175-5   When Commissioner can disallow deduction for tax loss  

175-5(1)    
This Subdivision sets out cases where the Commissioner may disallow some or all of a *tax loss (or of part of a tax loss) (the excluded loss ) as a deduction in calculating a company ' s taxable income of an income year after the *loss year.

175-5(2)    
However, the Commissioner cannot disallow the *excluded loss if the company:

(a) fails to meet a condition in section 165-12 (which is about the company maintaining the same owners) in respect of the *loss year or the income year; but

(b) meets the condition in section 165-13 in respect of the income year by satisfying the *business continuity test under section 165-210 .

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History

S 175-5(2) amended by No 7 of 2019, s 3 and Sch 1 item 9, by substituting para (b), effective 1 April 2019 and applicable in relation to income years starting on or after 1 July 2015. Para (b) formerly read:

(b) meets the condition in section 165-13 (which is about the company satisfying the same business test) in respect of the income year.

S 175-5(2) amended by No 164 of 2007 , s 3 and Sch 6 item 35, by repealing the note, applicable to:

(a) any tax loss that is incurred in an income year commencing on or after 1 July 2005; and

(b) any net capital loss that is made in an income year commencing on or after 1 July 2005; and

(c) any deduction in respect of a bad debt that is incurred in an income year commencing on or after 1 July 2005.

The note formerly read:

Note:

Companies whose total income for an income year is more than $100 million cannot meet the condition in section 165-13 in respect of that year: see section 165-212A .

S 175-5(2) amended by No 147 of 2005, No 114 of 2000 and No 16 of 1998.

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