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  • Completing your Loss carry back – 2020–21 early balancer substituted accounting period claim form

    These instructions will help you complete the Loss carry back claim form – 2020–21 Early balancer substituted accounting period or lodging a company tax return for part year (NAT 75344).

    This form is for corporate entities (including companies, corporate limited partnerships and public trading trusts) who want to claim a loss carry back offset prior to 1 July 2021, and either:

    • have an early balancer substituted accounting period (SAP)
    • need to lodge a company tax return for part of the 2020–21 income year.

    Other eligible corporate entities, like 30 June balancers, will be able to make the choice to carry back losses in their 2020–21 company tax return.

    If you choose to carry back a tax loss to claim the tax offset, you must complete and lodge the Loss carry back claim form before you lodge your company tax return.

    If you do not lodge the form with all the required information before lodging your company tax return, we may consider you have chosen not to claim the loss carry back tax offset in the approved form.

    To avoid delays in processing your company tax return, lodge the form at least five business days before lodging your company tax return. To avoid making errors, only complete and lodge this form when you have prepared and are ready to lodge your company tax return.

    See also:

    On this page:

    1. Accounting period

    Enter the start and end date of the accounting period. This should:

    • specify your part year or approved substitute period
    • match the period on your company tax return for the 2020–21 income year.

    2. Company information

    Tax file number (TFN)

    Write the TFN of the company.

    For a consolidated or multiple entry consolidated (MEC) group, use the head company's TFN. It is important to use the correct TFN to avoid delays in processing the form.

    Name of company

    Write the current company name as registered with the Australian Securities & Investments Commission (ASIC). Write it exactly as it is shown on the tax return for the same period.

    For a consolidated or MEC group, use the head company’s name.

    Australian business number (ABN)

    Write the ABN of the company.

    For a consolidated or MEC group, use the ABN of the head company. It is important to use the correct ABN to avoid delays in processing.

    3. Aggregated turnover 2020–21

    Only complete Labels X and Y if you are carrying back a tax loss from the 2020–21 income year.

    Label X – select a category below based on your aggregated turnover range for the 2020–21 income year. Your aggregated turnover range selected can be based either on your current year's aggregated turnover (the 2020–21 income year) or your previous income year's aggregated turnover (the 2019–20 income year).

    Aggregated turnover range 2020–21

    Category

    Aggregated annual turnover range

    A

    $0 to less than $7.5 million

    B

    $7.5 million to less than $10 million

    C

    $10 million to less than $20 million

    D

    $20 million to less than $40 million

    E

    $40 million to less than $50 million

    F

    $50 million to less than $100 million

    G

    $100 million to less than $200 million

    H

    $200 million to less than $300 million

    I

    $300 million to less than $400 million

    J

    $400 million to less than $500 million

    K

    $500 million to less than $600 million

    L

    $600 million to less than $700 million

    M

    $700 million to less than $800 million

    N

    $800 million to less than $900 million

    O

    $900 million to less than $1 billion

    P

    $1 billion or over

    Label Y – if you are a significant global entity or selected P at Label X, write the amount of your actual aggregated turnover rounded to the nearest $100 million for the 2020–21 income year at Label Y.

    Your aggregated turnover specified can be either your current year's aggregated turnover (the 2020–21 income year) or your previous year's aggregated turnover (the 2019–20 income year).

    Note: You will not be penalised for specifying an incorrect category or amount where you make your best attempt to calculate your aggregated turnover.

    For more information about calculating your aggregated turnover, see:

    4. Aggregated turnover 2019–20

    Only complete Labels X and Y if you are carrying back a loss from the 2019–20 income year.

    Label X – select a category below based on your aggregated turnover range for the 2019–20 income year. Your aggregated turnover range selected can be based either on your 2019–20 aggregated turnover (the income year you have carried back a loss from) or your previous income year's aggregated turnover (the 2018–19 income year).

    Aggregated turnover range 2019–20

    Category

    Aggregated annual turnover range

    A

    $0 to less than $7.5 million

    B

    $7.5 million to less than $10 million

    C

    $10 million to less than $20 million

    D

    $20 million to less than $40 million

    E

    $40 million to less than $50 million

    F

    $50 million to less than $100 million

    G

    $100 million to less than $200 million

    H

    $200 million to less than $300 million

    I

    $300 million to less than $400 million

    J

    $400 million to less than $500 million

    K

    $500 million to less than $600 million

    L

    $600 million to less than $700 million

    M

    $700 million to less than $800 million

    N

    $800 million to less than $900 million

    O

    $900 million to less than $1 billion

    P

    $1 billion or over

    Label Y – if you are a significant global entity or selected P at Label X, write the amount of your actual aggregated turnover rounded to the nearest $100 million for the 2019–20 income year at Label Y.

    Your aggregated turnover specified can be either your 2019–20 aggregated turnover (the income year you have carried back a loss from) or your previous year's aggregated turnover (the 2018–19 income year).

    Note: You will not be penalised for specifying an incorrect category or amount where you make your best attempt to calculate your aggregated turnover.

    5. Franking account balance

    A Opening franking account balance

    To claim a loss carry back tax offset, you must provide the franking account balance at the beginning of the 2020–21 income year.

    Label A – write the balance of the franking account at the beginning of the 2020–21 income year.

    If you are a foreign resident (other than a New Zealand franking company) without a franking account balance, write 0 in Label A.

    B Closing franking account balance

    Label B – write the balance of the franking account at the end of the 2020–21 income year. This amount should match the amount reported at Label M of Item 8 Financial and other information in your company tax return for the 2020–21 income year.

    If you are a foreign resident (other than a New Zealand franking company) without a franking account balance, write 0 in Label B.

    6. Loss carry back calculation

    Label A – write the amount of tax losses incurred in the 2019–20 income year that you are choosing to carry back to the 2018–19 income year. If you are not choosing to carry back a loss from the 2019–20 income year, write 0 in Label A.

    Label B – write the amount of tax losses incurred in the 2020–21 income year that you are choosing to carry back to the 2018–19 income year. If you are not choosing to carry back a loss from the 2020–21 income year, write 0 in Label B.

    Label C – write the amount of tax losses incurred in the 2020–21 income year that you are choosing to carry back to the 2019–20 income year. If you are not choosing to carry back such a loss from the 2020–21 income year, write 0 in Label C.

    The following types of losses cannot be carried back:

    • net capital losses
    • tax losses that have been transferred under Subdivision 170-A of the Income Tax Assessment Act 1997 (ITAA 1997) – transfers of losses within certain wholly-owned groups of companies
    • tax losses that have been transferred under Subdivision 707-A of the ITAA 1997 – transfers to the head company of a consolidated group by an entity joining the group
    • excess franking tax offsets which have been converted into tax losses (refer to section 36-55 of the ITAA 1997).

    If you are required to complete a Losses schedule for the 2020–21 income year, the amount of the tax losses shown at Labels A to C on the Loss carry back claim form must be included at Label G Tax forgone deducted in Part F of the Losses schedule.

    If you are a head company of a consolidated or MEC group and are required to complete a Consolidated groups losses schedule for the 2020–21 income year, the amount of the tax losses shown at Labels A to C on the Loss carry back claim form must be included at Label H Tax losses cancelled or forgone in Part F of the Losses schedule.

    Tax rate

    Label G – select the tax rate used to calculate your income tax liability in 2019–20.

    Label H – select the tax rate used to calculate your income tax liability in 2020–21.

    This is your corporate tax rate for the loss year and will be used to convert the amount at step 2 in section 160-10 of the ITAA 1997 into a tax equivalent amount for working out your loss carry back tax offset.

    Note: These labels only need to be completed for the year you incurred a tax loss that you are choosing to carry back.

    Net exempt income

    Label I – if you are choosing to carry back a loss to the 2018–19 income year, write the amount of any unutilised net exempt income that you had in the 2018–19 income year.

    Label J – if you are choosing to carry back a loss to the 2019–20 income year, write the amount of any unutilised net exempt income that you had in the 2019–20 income year.

    Net exempt income can be derived by subtracting expenditure incurred in deriving exempt income from the total amount of income that is exempt from Australian tax.

    Do not include an amount of net exempt income that has already been used (see subsection 960-20(4) of the ITAA 1997).

    Income tax liability

    Label L – if you are choosing to carry back a loss to the 2018–19 income year, write the amount of income tax assessed to you for the 2018–19 income year. This is the amount assessed at T5 Tax payable in the calculation statement of your tax return for the 2018–19 income year or your tax liability after any amendments to this year.

    Label M – if you are choosing to carry back a loss to the 2019–20 year, write the amount of income tax assessed to you for the 2019–20 income year. This is the amount assessed at T5 Tax payable in the calculation statement of your tax return for the 2019–20 income year or your tax liability after any amendments to this year.

    Loss carry back tax offset

    Follow these steps to calculate your loss carry back tax offset:

    1. For each tax loss that you are carrying back to an earlier income year
      1. determine the amount of the tax loss you are carrying back
      2. work out the net exempt income, that has not previously been used, in that earlier income year
      3. subtract the amount at step 1b from the amount at step 1a
      4. multiply the result from step 1c by your tax rate for the income year in which you made the loss.
       
    2. If more than one tax loss is being carried back to the same earlier income year, add the step 1d results together. The amount you can claim will be capped at your income tax liability for that earlier income year.
    3. If you are carrying back losses to more than one earlier income year, apply steps 1 and 2 for all years the losses are being carried back to and add the results together.
    4. If the amount calculated under step 3 is greater than your franking account surplus at the end of the current income year, your offset is limited to your franking account surplus. Otherwise, the amount of your tax offset is the amount calculated under step 3. Note: This step does not apply to foreign residents (other than New Zealand franking companies).

    Record this amount at:

    • Label O on the Loss carry back claim form
    • Label E in the calculation statement of your company tax return for the 2020–21 income year.

    Example 1A

    QWD Construction Pty Ltd (QWD) makes a tax loss of $1,300,000 in the 2020–21 income year. QWD chooses to carry the whole of the loss back to the 2018–19 and 2019–20 income years. QWD is eligible to claim the loss carry back tax offset.

    Tax information:

    • taxable income for 2018–19: $1,000,000
    • unutilised net exempt income for 2018–19: $100,000
    • income tax liability for 2018–19: $300,000
    • taxable income for 2019–20: $500,000
    • net exempt income for 2019–20: $0
    • income tax liability for 2019–20: $150,000
    • franking account balance at the end of 2020–21: $500,000
    • tax rate for all years is 30%.

    Method statement

    Step 1 – For the loss carried back to the 2018–19 income year:

    • QWD chooses to carry back $1,100,000 of the tax loss in the 2020–21 income year to the 2018–19 income year. It therefore records $1,100,000 at Label B.
    • The unutilised net exempt income of $100,000 is subtracted from the carried back loss leaving $1,000,000.
    • The $1,000,000 is multiplied by the tax rate for the 2020–21 income year (30%) giving a result of $300,000.

    Step 2 – For the loss carried back to the 2018–19 income year:

    • Only the loss from one income year is being carried back to the 2018–19 income year and the result from step 1 was $300,000.
    • This does not exceed the tax liability for the 2018–19 income year and therefore the step 2 amount for the 2018–19 income year is $300,000.

    Step 1 – For the loss carried back to the 2019–20 income year:

    • QWD chooses to carry back $200,000 of the tax loss in the 2020–21 income year to the 2019–20 income year. It therefore records $200,000 at Label C.
    • There was no net exempt income in the 2019–20 income year and therefore no reduction is necessary.
    • The $200,000 is multiplied by the tax rate (30%) giving a result of $60,000.

    Step 2 – For the loss carried back to the 2019–20 income year:

    • Only the loss from one income year is being carried back to the 2019–20 income year and the result from step 1 was $60,000.
    • This does not exceed the tax liability for the 2019–20 income year and therefore the step 2 amount for the 2019–20 income year is $60,000.

    Step 3 – The amounts calculated for step 2 for the 2018–19 income year and the 2019–20 income year are added together and equal $360,000.

    Step 4 – The amount calculated for step 3 does not exceed the franking account surplus at the end of the 2020–21 income year. Therefore, the loss carry back offset is $360,000. In its 2020–21 company tax return, QWD claims a $360,000 loss carry back refundable tax offset by:

    • writing it at Label O in the loss carry back claim form
    • adding this amount to other amounts (where applicable) at Label E on the calculation statement in its 2020–21 company tax return.

    The following labels in the form are completed for the loss carry back calculation.

    6. Loss carry back calculation

    Label

    Value

    A. Tax loss for 2019–20 carried back to 2018–19

    $0

    B. Tax loss for 2020–21 carried back to 2018–19

    $1,100,000

    C. Tax loss for 2020–21 carried back to 2019–20

    $200,000

    G. Tax rate for 2019–20

    30%

    H. Tax rate for 2020–21

    30%

    I. Net exempt income for 2018–19

    $100,000

    J. Net exempt income for 2019–20

    $0

    L. Income tax liability for 2018–19

    $300,000

    M. Income tax liability for 2019–20

    $150,000

    O. Loss carry back tax offset

    $360,000

    If QWD was required to complete the Losses schedule, it would include $1,300,000 at Label G Tax losses forgone in Part F of the Losses schedule.

    QWD has no tax losses available from the 2020–21 income year to carry forward.

    End of example

     

    Example 1B

    QWD Construction Pty Ltd (QWD) makes a tax loss of:

    • $1,300,000 in the 2020–21 income year
    • $400,000 in the 2019–20 income year.

    It is eligible to claim the loss carry back tax offset and wants to do so.

    Tax information:

    • taxable income for 2018–19: $1,500,000
    • income tax liability for 2018–19: $450,000
    • tax loss for 2019–20: $400,000
    • tax rate for 2019–20: 27.5%
    • tax loss for 2020–21: $1,300,000
    • tax rate for 2020–21: 26%
    • franking account balance at the end of 2020–21: $500,000.

    Method statement

    Step 1 – For the loss made in the 2019–20 year:

    • QWD chooses to carry back all $400,000 of the 2019–20 tax loss to the 2018–19 income year. It therefore records $400,000 at Label A.
    • There was no exempt income in the 2018–19 year and therefore there is no reduction.
    • The $400,000 is multiplied by the tax rate of 27.5% for the 2019–20 income year, giving a result of $110,000.

    Step 1 – For the loss made in the 2020–21 year:

    • QWD chooses to carry back $500,000 of the 2020–21 tax loss to the 2018–19 income year. It therefore records $500,000 at Label B.
    • There was no exempt income in the 2018–19 year and therefore there is no reduction.
    • The $500,000 is multiplied by the tax rate of 26% for the 2020–21 income year, giving a result of $130,000.

    Step 2 – The amounts calculated for step 1 for the losses carried back from the 2019–20 and 2020–21 years are added together giving a result of $240,000. As this amount does not exceed the tax liability for the 2018–19 income year, the step 2 amount is $240,000.

    Step 3 – The losses are only being carried back to one earlier income year (2018–19) therefore the step 3 amount is also $240,000.

    Step 4 – The amount calculated for step 3 does not exceed the franking account surplus at the end of the 2020–21 income year. Therefore, the loss carry back offset is $240,000. In its 2020–21 company tax return, QWD claims a $240,000 loss carry back refundable tax offset by:

    • writing it at Label O in the loss carry back claim form
    • adding this amount to other amounts (where applicable) at Label E on the calculation statement in its 2020–21 company tax return.

    The following labels in the form are completed for the loss carry back calculation.

    6. Loss carry back calculation

    Label

    Value

    A. Tax loss for 2019–20 carried back to 2018–19

    $400,000

    B. Tax loss for 2020–21 carried back to 2018–19

    $500,000

    C. Tax loss for 2020–21 carried back to 2019–20

    $0

    G. Tax rate for 2019–20

    27.5%

    H. Tax rate for 2020–21

    26%

    I. Net exempt income for 2018–19

    $0

    J. Net exempt income for 2019–20

    $0

    L. Income tax liability for 2018–19

    $450,000

    M. Income tax liability for 2019–20

    $0

    O. Loss carry back tax offset

    $240,000

    If QWD was required to complete the Losses schedule, it would include $900,000 at Label G Tax losses forgone in Part F of the Losses schedule.

    QWD has $800,000 tax losses remaining to carry forward from the 2020–21 income year.

    End of example

    7. Declarations

    Tax agent’s declaration

    If the tax agent is a partnership or a company, this declaration must be signed by a person authorised by that partnership or company to sign on its behalf.

    Include the tax agent's name and the authorised person's name, phone number, reference number, signature and date.

    Public officer’s declaration

    The public officer is responsible for doing all things required by the company under section 252 of the Income Tax Assessment Act 1936.

    In the case of default, the public officer is liable to the same penalties. For example, the public officer is responsible for lodging the company tax return. If the tax return is lodged late, the public officer may be liable for a failure to lodge on time penalty.

    Include the public officer's name, phone number, signature and date.

    Lodgment

    Fill in this form on your screen and sign and date the declaration. When completed, save the form to your computer.

    Lodge your form via our Online services for agents (OSFA), Online services for business, or Business Portal:

    • Select New message
    • Topic name: Income tax
    • Subject: Lodge loss carry back claim form
    • Attach the saved PDF form.

    Note: To avoid processing delays of your company tax return, lodge this form five business days before lodging your company tax return via our Online services for agents, Online services for business or Business Portal.

    Last modified: 09 Apr 2021QC 64814