To ensure current venture capital tax concessions support genuine early stage Australian start‑ups, the previous Government announced a review into the tax treatment of venture capital, with the Terms of Reference for the review released on 7 July 2021.
Recent trends demonstrate a vibrant Australian venture capital industry with a record $1.3 billion raised in 2020, compared to $200 million in 2013, according to the Australian Investment Council. This capital provides start‑ups and small innovative businesses with funds for projects that can lead to technology improvements and boost productivity growth.
As part of the 2016 National Innovation and Science Agenda, the previous Government implemented reforms to enhance the concessional treatment of the Early Stage Venture Capital Limited Partnership (ESVCLP) program to target this concession towards ventures at the very early stages of the lifecycle of a developing start‑up. The review evaluates the impact of these tax concessions.
The review was undertaken by Treasury and Industry Innovation and Science Australia (IISA) and covered the ESVCLP, the Venture Capital Limited Partnership (VCLP), and the Australian Fund of Funds (AFOFs) programs.
Treasury and IISA undertook stakeholder consultations to inform this review, and submissions are published on the Industry Innovation and Science Australia consultation website.
Terms of reference - 124KB
Consultation paper - 743KB