Commonwealth Consolidated Acts Commonwealth Consolidated ActsA company cannot deduct a bad debt unless:
(a) if the debt was incurred in an earlier income year--the company had the same owners and the same control throughout the period from the day on which the debt was incurred to the end of the income year in which it writes off the debt as bad; or
(b) if the debt was incurred in the current year--the company had the same owners and the same control during the income year both before and after the debt was incurred;
or, if there has been a change of ownership or control, the company satisfies the business continuity test by carrying on the same business (including entering into no new kinds of transactions and conducting no new kinds of business), or by carrying on a similar business (on or after 1 July 2015).
Note: The exceptions mentioned in this section apply differently in relation to designated infrastructure project entities: see section 415 - 40.
Table of sections
Operative provisions
165 - 119 Application of Subdivision
165 - 120 To deduct a bad debt
165 - 123 Company must maintain the same owners
165 - 126 Alternatively, the company must satisfy the business continuity test
165 - 129 Same people must control the voting power, or the company must satisfy the business continuity test
165 - 132 When tax losses resulting from bad debts cannot be deducted