Tax administration 2017

Early stage innovation companies - A deeper dive

Source: Taxation In Australia Journal Article

Published Date: 1 Mar 2017


As part of the National Innovation and Science Agenda, the government has been working to encourage innovation by ensuring that tax incentives are available for early stage investors in qualifying early stage innovation companies (ESICs) " typically, start-up companies with high growth potential. In May 2016, the Tax Laws Amendment (Tax Incentives for Innovation) Bill 2016 was passed to incentivise investors to direct funds towards ESICs through the provision of tax concessions, provided the ESIC satisfies both the early stage limb and the innovation limb " the latter of which can be satisfied by passing the principles-based test or the 100 points test. This article examines the new legislation and concludes that, despite the ambiguity surrounding the principles-based test and the lack of available guidance regarding the incentives generally, the ESIC tax concessions are a welcome initiative by the government and the uncertainty regarding these provisions can be resolved through further ATO guidance.

Sorry, this is subscriber only content.

To gain access to this material and much more - Subscribe Now.

(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).

Already a Subscriber? Login now


The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.

Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.

The Tax Institute
(ABN 45 008 392 372 (PRV14016))


The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009. 

Copyright Statement

All materials provided on this site are protected by copyright and are owned by or licensed to TTI.

Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.


Tax administration 2017

Share this page