Document ID: chunk:federal_register_of_legislation:C2014C00672:clause:5_2:p1
Version: federal_register_of_legislation:C2014C00672
Segment Type: clause
Provision Reference: sch 5 cl 2 (pt 1/5)
Character Range: 36761–39407

2  Before Division 164
Insert:

Division 160—Corporate loss carry back tax offset

Table of Subdivisions
 Guide to Division 160
160‑A Object of this Division
160‑B Entitlement to and amount of loss carry back tax offset
160‑C Loss carry back choice

Guide to Division 160

160‑1  What this Division is about

      A corporate tax entity can choose to "carry back" a tax loss it has for the current year, or for the preceding income year, against the income tax liability it had for either of the 2 income years preceding the current year.
      The entity gets a refundable tax offset for the current year that is a proxy for the tax the entity would save if it deducted the loss in the income year to which the loss is "carried back".
      The refundable tax offset is capped at the lesser of $1,000,000 multiplied by the corporate tax rate, and the entity's franking account balance.

Subdivision 160‑A—Object of this Division

Table of sections
160‑5 Object of this Division

160‑5  Object of this Division
  The object of this Division is to reduce the tax disincentive for corporate tax entities to take sensible investment risks. The Division does this by allowing such entities to offset their tax losses against their income tax liabilities for the 2 previous income years through a refundable tax offset.

Subdivision 160‑B—Entitlement to and amount of loss carry back tax offset

Table of sections
160‑10 Entitlement to loss carry back tax offset
160‑15 Amount of loss carry back tax offset

160‑10  Entitlement to loss carry back tax offset
  An entity is entitled to a *tax offset (the loss carry back tax offset) for the *current year if the following conditions are satisfied:
 (a) the entity is a *corporate tax entity throughout the current year;
Note: See also section 160‑25.
 (b) either or both of the following income years were *loss years:
 (i) the current year;
 (ii) the income year just before the current year (the middle year);
 (c) the entity had an *income tax liability for either or both of the following income years:
 (i) the middle year;
 (ii) the income year just before the middle year (the earliest year);
 (d) any of the following requirements are satisfied for the current year and each of the 5 income years before the current year:
 (i) the entity has lodged its *income tax return for the year;
 (ii) the entity was not required to lodge an income tax return for the year;
 (iii) the Commissioner has made an assessment of the entity's income tax for the year;
 (e) the entity makes a *loss carry back choice for the current year in accordance with Subdivision 160‑C.
Note 1: The entity is entitled to