Contact: Amanda Kennedy
Deloitte
Media & Communication Manager
0419 267 676

Contact: Neil Ward
Deloitte
Tax Partner
0411 269 703

Large corporates will welcome the proposed changes in the Budget that will once again allow them to recoup same business test losses according to Deloitte Tax Partner, Neil Ward.

“Previous changes prevented companies from carrying forward tax losses if they had a majority change of ownership, and had a turnover in excess of $100 million, Mr Ward said.

“The change means companies who have been prevented from using their tax losses in earlier years will be able to seek amendments to their tax returns, retrospective back to 1 July 2005.

It will particularly benefit companies, with high start-up losses, such as those in mining and infrastructure.”

“Companies who had previously written off losses as unrecoverable will be pleased to hear they will now be getting the benefit of the losses.

“This could improve their balance sheets as such losses would have been previously unrecognised.

“Companies will still be required to meet the strict rules of the same business test, although the detail of how the rules will be applied is still uncertain.”

Mr Ward said these changes are supplemented with technical amendments dealing with the continuity of ownership test which further improve the application of the loss recoupment rules.

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