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New tax incentives for investors in start-up companies


Recent changes to the law provide tax incentives to encourage investment in innovative start-up companies. These changes have been implemented as part of the government’s National Innovation and Science Agenda policy to align the tax system with a culture of entrepreneurship and innovation, and to encourage new investment in small Australian innovation companies with high-growth potential. The tax incentives permit investors to claim a 20% non-refundable carry-forward tax offset on their investment in an “early stage innovation company” (ESIC) which is generally capped at $200,000 annually. Investors may also disregard a capital gain on the disposal of their interests in an ESIC, provided the interests have been held for at least 12 months and not more than 10 years. This article considers the conditions for accessing the tax incentives, as well as some of the risk and compliance issues that may arise.

Author profiles

Mark Gioskos FTI
Mark specialises in tax advice, particularly in complex tax litigation and tax audit matters. He has extensive experience in negotiating and settling tax-related disputes, with an emphasis on achieving efficient and commercial outcomes for his clients. Mark regularly advises clients on various tax structuring and compliance issues in a range of areas, under both federal and state-based revenue laws. He also advises clients on various other legal issues, including financial and reporting obligations, and compliance with corporate and competition laws. Mark has been a member of The Tax Institute's Professional Development Committee in Victoria since February 2015. He holds a Bachelor of Laws and a Bachelor of Commerce from La Trobe University, and is currently completing a Master of Laws at the University of Melbourne. - Current at 26 July 2017
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Travis McCarthy


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