Monday -Friday - 9:00 - 18:00 New Zealand Time

How does the scheme work

The scheme uses pair of years “taxable income year” and “net loss year”. You must also have had taxable income in the previous year – the taxable income year. Losses would only be carried back for one year. It means

  • losses from the 2019–20 year could be carried back to the 2018–19 year; and
  • losses from the 2020–21 year could be carried back to the 2019–20 year.

For example: A tourism operator in Rotorua filed a tax return for the year 2018-2019. A profit for that year was $100,000 tax paid on this was $28,000(28%). Now for 2019-20 year they incurred a loss of $100,000. This loss will be carried back to the filed tax return of 2018-19 by amending the return. The amendment will result into a tax refund of $28,000. When 2019-20 tax return is filed it must show a loss of $100,000.

Similarly, if the same tourism operator anticipating low visitors in the region and a loss in 2020-21 of $120,000. And a provisional tax of $30,000 is paid for the 2019-20 year. An amendment to re-estimate of provisional tax can be submitted to receive a refund $30,000.

Above example shows how taxpayers would be able to claim a refund for a loss carry-back by re-estimating provisional tax (where the 2019–20 is the taxable income year) or amending their tax return (where 2018–19 is the taxable income year).

Generated with MOOJ Proforms Version 1.5

Please fill the form below to contact us! 

 

*Required information.