Not every business is having a great year. If yours runs through a company and 2026–27 is looking like a loss, there’s some good news. The ATO confirmed in September that loss carry-back is law again.
How it works
Instead of waiting for future profits to use a loss, an eligible company can carry it back against tax it paid in either or both of the two previous years and receive a refundable tax offset. For most companies, that means a 2026–27 loss carried back to 2024–25 and/or 2025–26, claimed in the 2026–27 company tax return.
Who can use it
- companies and other corporate tax entities (not sole traders, partnerships or family trusts)
- revenue losses only, not capital losses
- the company must have paid tax in one or both of the previous two years and be up to date with its returns
- the refund is capped by the company’s franking account balance at the end of the loss year.
Our tip: think before you pay dividends
Because the refund is capped by your franking balance, paying franked dividends before 30 June can shrink what you get back. If a loss is on the cards, plan dividends and the year-end position together, now rather than in June.
Want to know what a loss year could mean for your company? Book a catch-up with our Dee Why team.
This is general information only and not personal advice. Sources: ATO, 8 September 2026; PwC Tax Alert, 15 October 2026.
