This part of the law used to be about a special kind of loss that companies could use to reduce their taxes. It was called an ‘Attributed CFC loss’. CFC stands for ‘Controlled Foreign Company’. The law allowed these losses to be ‘carried back’, which means they could be used to lower taxes from an earlier time.
However, this section of the law doesn’t apply anymore. It was removed on 2 November 2012. The change affects income years that started on or after 1 July 2009. This means you can’t use these kinds of losses in the way described by this old rule anymore.
If you want to know more about why this change was made, you can look at section 28(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012.