Tax incentives for innovation

From 1 July 2016, tax incentives are available for eligible investors:

• early stage investors
• venture capital investors.

Early stage investors

From 1 July 2016, if you invest in a qualifying early stage innovation company (ESIC), you may be eligible for tax incentives. The incentives provide eligible investors, who purchase new shares, with:

• a non-refundable carry forward tax offset equal to 20% of the value of their qualifying investments. This is capped at a maximum tax offset amount of $200,000.
• a modified capital gains tax (CGT) treatment, under which capital gains made or accrued on qualifying shares that are continuously held for at least 12 months and less than ten years are exempt from CGT. Capital losses made or accrued on shares held less than ten years are also disregarded.

See also:

Tax incentives for early stage investors

Venture capital investors

A range of tax concessions are available for early stage venture capital limited partnerships (ESVCLPs) and venture capital limited partnerships (VCLPs).

From 1 July 2016, limited partners of new ESVCLPs may be entitled to claim a 10% non-refundable carry-forward tax offset to encourage new investment by reducing the effective cost of these kinds of investments.

Also from 1 July 2016, changes have been made to clarify existing arrangements and allow a wider range of investment activities for both new and existing ESVCLPs and VCLPs.

See also:

Venture capital and early stage venture capital limited partnerships