Malcolm Turnbull’s Innovation Statement released on 7th December 2015 provides tax incentives for early stage investors. The tax incentives will encourage early stage investment in innovative start-ups and should boost growth by fostering new enterprises and promoting entrepreneurship.

The tax incentives will apply from 1st July 2016 and provides concessional tax treatment for investors including:

  • A 20% non-refundable tax offset on investments, capped at $200,000 per investor per year.
  • A 10 year exemption on capital gains tax, provided investments are held for three years.

The tax incentives will only be available for investments in companies that:

  • Undertake an eligible business (details to be advised).
  • Were incorporated during the last three income years.
  • Are not listed on any stock exchange.
  • Have expenditure of less than $1 million in the previous income year.
  • Have income of less than $200,000 in the previous income year.

In addition, partners in early stage venture capital funds will also receive a 10% tax offset on the capital invested during the year. The tax concession is limited to funds with assets of less than $200 million.

Further details are available at National Innovation and Science Agenda.

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