There are proposed new temporary rules for tax loss carry backs under the COVID-19 crisis. If you believe that your business is forecast to make a loss in the 2019/20 financial year, we can assist you in making application to carry that estimated tax loss back to the 2018/19 financial year to lower that tax assessment. This potentially enables you to obtain a refund of tax paid for the 2018/19 financial year.
This proposed provision can also be applied where you believe that your business is forecast to make a loss in the 2020/21 financial year. In this case we can assist you in making application to carry that estimated tax loss back to the 2019/20 financial year to lower that tax assessment, and file a provisional tax estimate with the IRD. This will have the effect of lowering the tax due on 7 May 2020 and also potentially enabling you to obtain a refund of tax already paid towards the 2019/20 year. The IRD have said that they will allow such estimates to be lodged even after the 7 May 2020 payment deadline has passed, so that any loss carry backs can be factored into the calculations.
However, the detail on these loss carry back measures has not yet been finalised and perhaps any future tax refunds resulting from utilising these measures might be best suited to paying back loans that are taken on now to fund current tax obligations.
Please contact us as soon as possible if you need assistance with liaising with the IRD.