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3.7.2. On Losses

Since current loss deduction and carry forward rules do not distinguish between domestic and foreign losses, the acquisition or cessation of Australian residency would, in principle, have no impact on a company’s ability to deduct losses it has incurred.

However, the operation of other tax rules that rest on the residence of the taxpayer have the effect of restricting the tax treatment of losses incurred before a company becomes a resident or after it loses its residence status. One clear instance in which this occurs is in relation to taxation under the group consolidation regime (see below).