The Australian government introduced a tax reform bill in Parliament on Tuesday. The package creates a new startup capital gains concession, adjusts R&D incentives, and expands venture capital rules. Eligible founders, employees, and investors would receive a 50% discount on qualifying capital gains.
Startup eligibility changes
The bill lowers the activity test threshold from more than 75% to more than 50% across at least two measures. Contractors and assets held for future qualifying use now count toward the workforce and asset tests. Companies can also notify the government to stop issuing qualifying equity while protecting existing holders.
R&D incentive adjustments
The bill gives ministers power to recognize activities integral to experimental research through legislative instruments. Core R&D offset rates can rise by up to 50%. A 10-year refundable offset limit remains, along with a $50,000 minimum expenditure requirement.
Venture capital and Senate path
Existing venture capital fund and investee thresholds remain unchanged from the September draft. Carried interest rules clarify treatment through trusts while relief stays conditional on qualifying investments. The bill must still pass the Senate, where the Greens have threatened to block the R&D changes unless oil and gas companies are excluded.
Early consultation on designated R&D activities is planned for early 2027. Areas may include clinical manufacturing and specialized technology development. No deadline for those consultations has been set.