The final report for the Venture Capital Tax Concessions review has been tabled in federal parliament.
The review was conducted by Treasury and Industry Innovation & Science Australia. Their conclusions are positive towards the concession programs and their contribution to the innovation economy.
Private capital industry peak body the Australian Investment Council (AIC) says key findings include:
- The tax concessions and investment vehicles offered by the Venture Capital Limited Partnership (VCLP) Early-Stage Venture Capital Limited Partnership (ESVCLP) and Australian Venture Capital Fund of Fund (AFOF) programs have been well received.
- These programs have supported the growth of the Australian venture capital sector, which has experienced increased levels of venture capital investment, and the development of venture capital fund managers – the two primary objectives of the programs.
- The programs contribute to the growth of the venture capital sector and their removal would be detrimental to the sector.
- Stakeholders have noted that technical changes to the programs are required but the report does not make any recommendations on these. The Council will continue to work to position the need for these changes.
AIC says, importantly, the report notes that the VCLP program has facilitated significant foreign investment in the Australian venture capital sector, by offering the prospect of attractive returns and an internationally recognisable investment vehicle being a fiscally transparent Limited Partnership. AIC plans to continue to raise this point as part of future discussions with government stakeholders on the need for a Limited Partnership Collective Investment Vehicle.
The full report may be accessed here:
Venture Capital Tax Concessions Review - Final report (treasury.gov.au)