The Federal Government has opened a short consultation on the new tax incentives for investors in early stage companies, which was announced as part of the National Innovation and Science Agenda (NISA).
The new tax incentive will provide concessional tax treatment for investors through a non-refundable tax offset and a capital gains tax (CGT) exemption on investments that meet certain eligibility criteria.
More specially, the concessional tax treatments will be made available for investors who support innovative startups, with a:
- 20 per cent non-refundable tax offset on investment capped at $200,000 per investor, per year; and
- 10 year capital gains tax exemption for investments held for three years.
The incentive is based on the successful UK Seed Enterprise Investment Scheme and will be available for investments in companies that:
- undertake an eligible business (scope to be determined);
- that were incorporated during the last three income years;
- aren’t listed on any stock exchange; and
- have expenditure and income of less than $1 million and $200,000 in the previous income year respectively.
The consultation has opened with the release of a discussion paper and close on 24 February 2016.
AusBiotech will be making a submission to suggest how the incentive can be helpful to biotechnology start-up companies. Members are invited to submit their comments to Chief Industry Affairs Officer, Lorraine Chiroiu (lchiroiu@ausbiotech.org), by 23 February 2016.