From 15-04-2020 almost all entities trust, companies, sole trader, partnership can carry back the anticipated losses to avail tax refund. The scheme is another measure taken by the Government to assist struggling New Zealand business to deal with economic impact of Covid-19. The bill Covid-19 Response (Taxation and Other Regulatory Urgent Measures) is enacted now.
What is loss carry back
Under current rules when you make a profit you pay tax on the profit. And when you make a loss that loss is carried forward to offset against future income subject to loss continuity rules. The Government has introduced temporary section IZ8 in the Income Tax Act 2007 to offset loss in the current and prior year of tax return. It means if your business is anticipating loss in 2020-21 tax year, then you can use this loss in year 2019-20 tax return.
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