news The Federal Government introduced a new tax bill into Parliament yesterday that is aimed to drive investment, economic growth and job creation by “encouraging innovation, risk taking and an entrepreneurial culture”.
Called the Tax Laws Amendment (Tax Incentives for Innovation) Bill 2016, the new legislation includes provisions to give tax concessions to investors with the aim of promoting investment in innovative, high-growth potential startups.
“The bill will boost growth by fostering new enterprises and promoting entrepreneurship with a 20% non-refundable carry forward tax offset on investments in qualifying companies, capped at $200,000 per investor per year; and a ten year exemption on capital gains tax, provided investments are held for 12 months or more,” Treasurer Scott Morrison explained in a statement.
Additionally, the bill will bring changes to the tax treatment of early stage venture capital limited partnerships (ESVCLPs) to bring more investment into venture capital schemes.
The measure will see investors receiving a 10% non-refundable carry forward tax offset on capital invested through an ESVCLP, said Morrison.
Further, the maximum fund size for new and existing ESVCLPs will be increased to $200m, alongside other more general reforms to the income tax treatment of venture capital.
“The Government has been listening carefully to stakeholders during the development of these measures,” said the Treasurer. “We have consulted widely with investors, industry bodies, universities and the start-up community to incentivise innovation and reward greater risk taking, while also maintaining the integrity and sustainability of the tax system.”
The measures are part of the government’s $1.1bn National Innovation and Science Agenda (NISA) aimed to boost the economy by incentivising and rewarding innovation and scientific developments.
“Backing innovation to drive productivity is part of the Turnbull Government’s economic plan to successfully manage our transition,” Morrison said.