FED Loss Carry Back Offsets for Corporate Tax Entities

Treasury Laws Amendment (Tax Reform No. 2) Bill 2026

19 Aug 2026: Passed by Parliament and signed off by the governor.

This bill kicks in: TBA

House of Representatives

Senate

Assent

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Topics

asset write-off business tax corporate tax small business tax exemptions taxation

Links to official parliament websites

Official page: progress through parliament

Effects of this bill

If this bill passes, it means that:

Corporate tax entities that are not significant global entities can carry back tax losses to the previous two years; this provides a refundable tax offset.
The loss carry back offset is capped at the entity's franking account balance; this cap does not apply to certain foreign residents.
Corporate tax entities cannot carry back losses if the loss was transferred to or from the entity.
Corporate tax entities are banned from carrying back losses if the move is part of a scheme to profit from a change in voting control.
Entities must lodge a choice in the approved form to carry back losses.
Income from PNG Chiefs Limited is exempt from income tax for employees and former employees for ten years starting in 2025-26.
Small business entities get a higher instant asset write-off threshold; the limit rises from $1,000 to $20,000.

The Debate

What different members said when this bill was debated:

Dr Jim Chalmers ALP

“I move: That this bill be now read a second time. This bill is the next step in our government’s delivery of the most ambitious tax reform package for a quarter of a century. It’s all about helping more people to buy their own home, cutting income taxes for workers again and again, and better aligning the treatment of labour and asset income.”

Official source →

Katy Gallagher ALP

“I table a revised explanatory memorandum relating to the bill and move: That this bill be now read a second time. I seek leave to have the second reading speech incorporated in Hansard. Leave granted. The speech read as follows— I move that this Bill be now read a second time.”

Official source →

Michaelia Cash LIB

“What an absolutely extraordinary capitulation by the Albanese government. After all the denials that we have heard from those opposite, after all of the excuses and after all of the arrogance, they are now voting to repeal the widows tax, which they said did not exist.”

Official source →

Lisa Darmanin ALP

“The Treasury Laws Amendment (Tax Reform No. 2) Bill 2026 represents the next stage of the government’s ambitious tax reform agenda.”

Official source →

Sean Bell PHON

“Why are we here today? We’re here today, again, to fix a mistake from this hapless Albanese Labor government. We’re here today to fix their widow tax that they legislated after everyone told them not to. We all said: ’Your legislation is flawed, and in your rush to implement a big tax grab on the Australian people you’re making a terrible mistake.”

Official source →

Claire Chandler LIB

“Every government says that it supports small business, but the real test is whether the policies of that government give business the confidence to invest. That is the test that we in the coalition have applied to the Treasury Laws Amendment (Tax Reform No. 2) Bill 2026. I want to be very clear: the coalition will be supporting this bill.”

Official source →

Jonathon Duniam LIB

“We are truly a hot ticket today with the amount of people that have come to observe debate in this place. As I rise to speak to the Treasury Laws Amendment (Tax Reform No.”

Official source →