Senate passes tax breaks for startups

Two new initiatives designed to make investment in Australian start-ups more attractive will be in place for the 2016-17 financial year after passing the Senate last week.

The measures are part of the Government’s National Innovation and Science Agenda, aimed at driving smart ideas that create business growth and jobs.

“These tax measures are designed to broaden and diversify the economy through economic policies that build growth and productivity,” said Industry Minister Christopher Pyne.

“The Tax Incentive for Early Stage Investors and New Arrangements for Venture Capital Limited Partnerships will promote investment in innovative high-growth potential start-up companies and improve businesses’ access to venture capital.

“Over 4,500 startups are missing out on equity finance each year. These measures will help startups get access to crucial funding to grow their startup.

“Investors, venture capital funds and innovative companies in all industries will benefit from these measures,” he said. 

The Tax Incentive for Early Stage Investors gives tax concessions to eligible early stage investors who invest in qualifying companies. The concessions include a capped 20 per cent non-refundable tax offset and 10 year capital gains tax exemption for investments.

The New Arrangements for Venture Capital Limited Partnerships provide a range of changes that will improve access to capital and make investing in venture capital more user-friendly and internationally competitive.

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