The proposed reduction in the company tax rate from 30% to 29% has been scrapped.
Bad Debts
With effect from 8 May 2012 a tax deduction will be denied for a bad debt that has been written off as bad where the debtor is a related party and is not in the same tax consolidated group. The corresponding gain to the debtor will not be assessable.
Company Loss Carry-Back
This measure is to provide tax relief for companies by allowing them to carry back tax losses so they would be entitled to receive a tax refund against tax previously paid. A one year carry back will apply in the 2012/2013 tax year where tax losses incurred in that year can be carried back and offset against tax paid in the previous tax year (being 2012 tax year). For the tax years 2013/2014 and beyond, the tax losses can be carried back and offset against tax paid for up to 2 years earlier.
Companies will be able to carry back up to $1.0m of losses each year (i.e. potential maximum tax refund each year being $300,000 at the present company tax rate of 30%).
