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INCOME TAX ASSESSMENT ACT 1997 - SECT 195.15

Tax loss for year in which company becomes a PDF

  (1)   This section applies if a company becomes a * PDF during an income year and is still a PDF at the end of it.

  (2)   Divide the income year into periods as follows:

  (a)   the non - PDF period is the period beginning at the start of the income year and ending when the company becomes a * PDF;

  (b)   the PDF period is the rest of the income year.

  (3)   For each period, work out whether the company has a taxable income or a * tax loss (or both), treating each period as if it were an income year.

  (4)   If the company has:

  (a)   a taxable income for the non - PDF period; and

  (b)   a * tax loss for the PDF period;

that tax loss is a tax loss of the company for the income year.

Note:   The company can only deduct the tax loss while it is a PDF: see section   195 - 5.

  (5)   If the company has a * tax loss for the non - PDF period:

  (a)   section   195 - 5 does not prevent the company from deducting its tax loss for the income year in a later income year; and

  (b)   section   195 - 10 does not prevent the company from transferring an amount of the tax loss under Subdivision   170 - A (which is about the transfer of tax losses within certain wholly - owned groups of companies); and

  (c)   section   195 - 37 does not prevent the company from * carrying back its tax loss for the purpose of working out the amount of the company's * loss carry back tax offset for the 2020 - 21, 2021 - 22 or 2022 - 23 income year;

to the extent that the tax loss does not exceed the tax loss for the non - PDF period.

  (6)   These rules apply in addition to the other rules about how * tax losses are applied or transferred.

The other rules start in Division   36 (which is about tax losses
of earlier income years).


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