In accordance with its announced (2015) innovation tax incentives policy, the government legislated to improve tax incentives for investments in early stage projects.
Legislation for these measures applies from 1 July 2016.
- for early stage investors:
- a 20% non-refundable carry forward tax offset on investments in qualifying companies (capped at $200,000 per investor per year);
- a 10 year exemption on capital gains tax, provided investments are held for 12 months or more.
- for Early Stage Venture Capital Limited Partnerships:
- investors receive a 10% non-refundable carry forward tax offset on capital invested
- the maximum fund size for new and existing ESVCLPs increased from $100 million to $200 million along with a number of reforms made to the income tax treatment of venture capital more generally.
Draft Guidelines- ATO seeking feedback
Tax incentives for early stage investors:
The ATO is developing guidance to help determine whether a company meets Early Stage Innovation Companies principles-based innovation test.
To review the draft guide see here.
Proposed amendments – from 1 July 2018
The government has announced tax amendments to the FinTech and innovation legislation to ensure access for finance and insurance ventures and to implement minor technical adjustments. A draft of the amendments has been made available for comment by 10 November 2017.
Reporting
ESICs are required to report annually on qualifying investments under the tax incentives arrangements no later than 31 July for the immediately preceding financial year.
More details (including what information to report) here.
Further information:
- Article (July 9, 2018): Investment perks for investors in ESICs
- Article (March 29, 2017): Tax Incentives in Australia For Innovation
- ATO – ESVCLP tax incentives and concessions
- Minister’s media release 15 March 2016
- Policy announcement December 2015
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This page was last modified 2018-07-19
