A temporary tax relief allows eligible companies, with an aggregated turnover of less than $5 billion, to carry back tax losses incurred in the 2020, 2021 or 2022 financial years, to be used against profits taxed in a previous year, 2019 or later.

These companies will receive a refundable tax offset in the year they made a loss, if they elect to use this mechanism when they lodge their 2020-21 or 2021-22 tax return. The losses carried back must not be more than earlier taxed profits and must not result in a franking account deficit.

Any tax losses that are not fully offset against previous taxed profits, or not elected to be used, will be carried forward as normal.  Companies can elect the amount that they wish to carry back.