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How loss carry back tax offsets work

Explains how the refundable tax offset for tax losses you made in the 2019–20 to 2022–23 income years works.

Last updated 31 May 2023

Loss carry back provides a refundable tax offset that eligible corporate entities can claim:

  • after the end of their 2020–21, 2021–22 and 2022–23 income years
  • in their 2020–21, 2021–22 and 2022–23 company tax returns.

Eligible entities get the offset by choosing to carry back losses to earlier years in which there were income tax liabilities. The offset effectively represents the tax the eligible entity would save if it was able to deduct the loss in the earlier year using the loss year tax rate. As it is a refundable tax offset, it may result in a cash refund, a reduced tax liability or a reduction of a debt you owe us.

The eligible entity does not need to amend the earlier income years to claim the offset.

If an entity does not choose to carry back a loss, the loss may be carried forward to use in a later income year.

Entities can use the loss carry back tax offset tool to work out if they are eligible to claim the refundable tax offset. It also calculates the maximum amount they can choose to claim if they are eligible.

Loss carry back is intended to interact with temporary full expensing, encouraging new investment which may result in tax losses. Where the choice to carry back tax losses results in a tax refund, this will increase business cash flow.