The Budget contains two welcome measures for company clients: one taking effect immediately, and one from 2028.

Loss Carry-Back for Companies: From 1 July 2026

Companies with aggregated annual global turnover of less than $1 billion will be able to carry back a tax loss and offset it against tax paid in either of the two previous financial years. If your company paid tax in 2024-25 or 2025-26 and subsequently incurs a loss in 2026-27 or later, you can apply that loss against the earlier tax paid and receive a cash refund. The carry-back applies to revenue losses only not capital losses and is limited by your company’s franking account balance. This measure is particularly valuable for companies that were profitable in recent years but are now experiencing a downturn.

Loss Refundability for Start-Up Companies: From 1 July 2028

From 1 July 2028, small start-up companies with annual turnover of less than $10 million that generate a tax loss in their first two years of operation will be able to convert that loss into a refundable tax offset meaning the ATO will pay out the offset as a cash refund even where no tax has previously been paid. The offset is capped at the value of FBT and withholding tax on wages paid to Australian employees in the loss year.

Expanded Venture Capital Incentives: From 1 July 2027

From 1 July 2027, the venture capital tax incentive programs will be expanded. The cap for standard venture capital limited partnerships increases from $250 million to $480 million; for early stage funds, from $50 million to $80 million. These changes apply to both new and existing funds. Note: the separate Eligible Venture Capital Investor program has been closed to new applications from Budget night, 12 May 2026.

If your company has paid tax in recent years and is now experiencing or expecting a loss, please contact us as a matter of priority a cash refund may be available sooner than you think.

For those starting a new business, or with an interest in venture capital investment, please get in touch to discuss how these measures may apply to you.
t: +61 7 3177 4120
e: advisors@hksrussell.com

Posted on May 15, 2026 by Charisse Russell - Articles