Moore Stephens explains the latest tax incentives for investment in Australian innovation companies.

On 27 July 2016 Moore Stephens WA held an information session for Investors and Early Stage Innovation Companies (ESIC).

The speaker panel consisted of Davide Costanzo (Moore Stephens), Jeff Broun (PCP), David Greatwich (Swanson Reed) and Paul Clark (Venturecast).

The event focussed on the new tax incentives that came into play on the 1 July 2016 which can give an investor a 20% tax offset and a capital gains tax (CGT) exemption for their investment in an ESIC.

Davide Costanzo from Moore Stephens explained: ‘’Innovation is extremely important in the current economic climate and the Government is supporting several initiatives to encourage both innovation companies and investors into these companies by providing a range of incentives, including tax incentives. It is therefore important to understand how to access these tax incentive and how they may benefit you‘’.
Under the new legislation an investor can benefit from a tax offset and CGT exemption for investing in an ESIC.
A sophisticated investor can enjoy up to $200,000 as a tax offset, whilst a retail investor can enjoy a tax offset up to $10,000.
Both sophisticated and retail investors can potentially enjoy a CGT exemption for investments in an ESIC held more than 12 months and less than 10 years.
An ESIC is an innovation company that is genuinely focused on developing new or significantly improved products or services for the purpose of commercialisation and must pass certain requirements, including but limited to the 100 Point Innovation Test or the Principles Based Test.

The company will need to be ‘Investor Ready’ for an Investor to benefit from the tax incentives available.
We can assist both the Investor and an ESIC.
We can assist the ESIC to be ‘Investor Ready’ and we can provide comfort to the Investor that their investment is eligible for a tax incentive.

Please contact Davide Costanzo or Wendy Davies from Moore Stephens on (08) 9225 5355 to discuss any questions you may have and how we can help you. 


The above comments are general in nature and do not amount to advice. The comments must not be relied on in any way. Please contact Moore Stephens should you require specific advice.