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New tax incentives for investors in start-up companies

Published on 01 Feb 17 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

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 advising on 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 also regularly advises on structuring and compliance issues under Federal and State based revenue laws, as well as other regulatory and administrative law matters, and in general commercial transactions. Mark is a Fellow member of The Tax Institute, and has been a member of The Tax Institute's Professional Development Committee in Victoria since 2015. He has written a number of articles published in professional journals, is a regular presenter at seminars and discussion groups, and holds a Master of Laws from the University of Melbourne. - Current at 02 June 2020
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Travis McCarthy

 

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