Tax incentives in National Innovation and Science Agenda

The government has announced a number of tax incentives as part of its National Innovation and Science Agenda to encourage innovation, risk taking and to build an entrepreneurial culture in Australia.

The incentives are:

  • concessional tax treatment for early stage investors in innovative start-ups including a 20 per cent non-refundable tax offset capped at $200,000 per investor per year, and a 10-year capital gains tax exemption provided investments are held for three years
  • changes to the tax treatment of Early Stage Venture Capital Limited Partnerships, including partners receiving a 10 per cent non-refundable tax offset on capital invested during the year
  • relaxation of the existing “same business test” for accessing losses and introducing a more flexible “predominantly similar business test” to allow businesses to access prior year losses when they make minor changes to their operations
  • allow taxpayers to self-assess the tax-effective life of acquired intangible assets that is currently fixed by statute to allow for faster depreciation claims
    It is expected that these measures will generally apply from 1 July 2016. CPA Australia has welcomed the measures (PDF).