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  • New arrangements for venture capital investment

    The Tax Laws Amendment (Tax Incentives for Innovation) Act 2016External Link received royal assent on 5 May 2016. It provides new tax incentives for investments in early stage venture capital limited partnerships. It also amends the early stage venture capital limited partnerships (ESVCLP) and venture capital limited partnerships (VCLP) regimes to improve access to capital and make the regimes more attractive to investors.

    Broadly, from 1 July 2016:

    • investors will receive a 10% non-refundable carry-forward tax offset on investments made through an ESVCLP, and
    • the maximum fund size for new and existing ESVCLPs will be increased to $200 million.

    Encouraging venture capital investment in FinTech

    In May 2016, the Australian Government sought feedback on how to ensure investors in FinTech start-up activities are eligible for the venture capital tax concessions. Submissions closed on 3 June 2016.

    For more information, see Encouraging venture capital investment in FinTechExternal Link on the Treasury website and also Venture Capital - changes to treatment of FinTech.

    Technical amendments to venture capital programs

    As part of the Mid-Year Economic and Fiscal Outlook 2017–18, the Government announced they will make a series of minor technical amendments to the ESVCLP and VCLP regimes.

    The amendments to the income tax law will clarify the operation of the investment requirements under these regimes and the interactions between these regimes and other parts of the tax law.

    The amendments received royal assent on 26 February 2020 and will apply to investments, income years or CGT events happening on or after 1 July 2018.

    Legislation and supporting material

    The Treasury Laws Amendment (2018 Measures No. 2) Bill 2019External Link received royal assent on 26 February 2020.

    The Treasury Laws Amendment (2017 Measures No. 1) Act 2017External Link received royal assent on 4 April 2017. It made minor technical changes to the Income Tax Assessment Act 1997 to ensure investors investing through an interposed trust can access the capital gain concessions provided by venture capital investment measures.

    More information

      Last modified: 27 Feb 2020QC 48325