Treasury Laws Amendment (2017 Enterprise Incentives No. 1) Act 2019 (7 of 2019)
Schedule 1 Access to losses
Part 1 Companies
Income Tax Assessment Act 1997
8 After section 165-210
Insert:
165-211 The business continuity test - carrying on a similar business
(1) A company also satisfies the business continuity test in relation to:
(a) a *tax loss for an income year starting on or after 1 July 2015; or
(b) taxable income for an income year starting on or after 1 July 2015; or
(c) a *net capital loss for an income year starting on or after 1 July 2015; or
(d) a debt, incurred in an income year starting on or after 1 July 2015, that the company writes off as bad;
if throughout the *business continuity test period it carries on a business (its current business ) that is similar to the *business it carried on immediately before the *test time (its former business ).
(2) Without limiting the matters that may be taken into account in ascertaining whether the company's current business is similar to its former business, the following must be taken into account:
(a) the extent to which the assets (including goodwill) that are used in its current business to generate assessable income throughout the *business continuity test period were also used in its former business to generate assessable income;
(b) the extent to which the activities and operations from which its current business generated assessable income throughout the business continuity test period were also the activities and operations from which its former business generated assessable income;
(c) the identity of its current business and the identity of its former business;
(d) the extent to which any changes to its former business result from development or commercialisation of assets, products, processes, services or marketing or organisational methods of the former business.
(3) However, the company does not satisfy the *business continuity test under this section if, before the *test time, it:
(a) started to carry on a *business it had not previously carried on; or
(b) in the course of its business operations, entered into a transaction of a kind that it had not previously entered into;
and did so for the purpose, or for purposes including the purpose, of being taken to have carried on throughout the *business continuity test period a business that is similar to the business it carried on immediately before the test time.
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