Tax incentives for early stage investors

Tax incentives for early stage investors are applicable for new investments in early-stage innovation companies (ESIC). Eligible investors receive a non-refundable carry-forward tax offset of 20% of the investment, capped at a $200,000 maximum. They are also eligible for modified capital gains tax (CGT) treatment, where the capital gains on qualifying shares held continuously for at least one year and less than 10 years are exempt from CGT.

Your investors may be eligible for this tax incentive as an individual, company, trustee of a trust or the member of a trust or partnership. The reporting requirements for ESICs must be dealt with in a timely and rigorous manner. Information related to investor entities are required to be submitted to the ATO within 31 days after the end of the financial year.

We can help you in the following ways:

• Demonstrate compliance with stringent ESIC eligibility requirements
• Assist with the R&D tax incentive to meet the 100-point innovation test
• Provide inputs on the reporting requirements for ESIC investments.