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Tax Laws Amendment (Tax Incentives for Innovation) Bill 2016

Originating house
House of Representatives


Amends the: Income Tax Assessment Act 1997, Income Tax Assessment Act 1936 and Taxation Administration Act 1953 to: create an early stage investor regime that provides tax incentives for qualifying investors through a non-refundable tax offset and capital gains tax exemption on innovation related investments; require early stage innovation companies to report on specific innovation related investments; and provide a mechanism for Innovation Australia to provide guidance about whether particular investment activities are ineligible activities; Income Tax Assessment Act 1997 to: provide non-refundable carry-forward tax offsets for limited partners in early stage venture capital limited partnerships (ESVCLP); provide for a capital gains tax exemption for fixed and unit trust beneficiaries of partners in ESVCLPs; and exclude small entities from eligible venture capital investment auditor requirements; Venture Capital Act 2002 to increase the maximum fund size for ESVCLPs to $200 million; Income Tax Assessment Act 1997 and Venture Capital Act 2002 to: remove the requirement that an ESVCLP divest an investment in an entity once the value of the entity’s assets exceeds $250 million; provide that an entity can invest in another entity and remain an eligible venture capital investment; and enable foreign venture capital funds of funds to hold more than 30 per cent of the committee capital of an ESVCLP and extend their access to capital gains tax and other income tax concessions in relation to eligible venture capital investments; and Income Tax Assessment Act 1936 and Taxation Administration Act 1953 to enable a managed investment trust to disregard its investment in, and through, an ESVCLP or venture capital limited partnership when determining if it is a trading trust.

Progress of bill

For committee reference information, please see the Notes section at the end of this page.

House of Representatives
Introduced and read a first time 16/03/16  
Second reading moved 16/03/16  
Lapsed at prorogation 15/04/16  
Restored to Notice Paper 02/05/16  
Second reading debate 02/05/16 Bill resumed at point of interruption
Second reading agreed to 02/05/16  
Third reading agreed to 02/05/16  
Introduced and read a first time 03/05/16  
Second reading moved 03/05/16  
Second reading debate 03/05/16  
Second reading debate 04/05/16  
Second reading agreed to 04/05/16  
Committee of the Whole debate 04/05/16  
Third reading agreed to 04/05/16  
Finally passed both Houses 04/05/16  
Assent 05/05/16 Act no: 54 - Year: 2016

Text of bill

  • First reading

  • As passed by both Houses


Explanatory memoranda

  • Explanatory memorandum


Second reading speeches

Proposed amendments

  • Australian Greens [sheet 7916]
MCKIM, Sen Nick


Schedules of amendments

Bills Digest

  • An electronic version of this Act is available on the Federal Register of Legislation (www.legislation.gov.au)