As part of its National Science and Innovation Agenda (NISA), the Turnbull Government recently announced the establishment of a fourth landing pad for Australian startups in Berlin, an emerging major tech hub with an increasingly international startup community.
The landing pads are designed to provide market-ready startups with a short-term operational base in innovation hotspots, helping them develop new markets and sustainable growth on a world scale.
No changes to the R&D Tax Incentive were announced in the Budget.
New measures for small business will in fact increase the benefit for companies with a turnover of less than $10m. With an increase to the small business threshold from $2m to $10m and a further drop in the small business corporate tax rate, the additional R&D Tax benefit for such companies will increase to 17.5 percent.
It is possible that changes to the R&D Tax Incentive may be announced at a later stage following the recent review of the programme by the Government.
On 4 May 2016, the Tax Laws Amendment (Tax Incentives for Innovation) Act 2016 was passed, creating investor-related tax initiatives announced as part of the NISA, effective from 1 July 2016.
The new provisions encourage new investment in Australian early stage innovation companies (ESICs) with high growth potential by providing qualifying investors with a 20 percent tax offset and a 10-year capital gains tax exemption for investments held for more than one year.
The Act also amends the early stage venture capital limited partnership (ESVCLP) and venture capital limited partnership (VCLP) regimes to improve access to capital and make the regimes more attractive to investors. The amendments provide a 10 percent tax rebate for limited partners in new ESVCLPs, relax restrictions on ESVCLP investments and fund size and clarify the legal framework for venture capital investment in Australia.
The above initiatives and measures are aimed at encouraging innovation and risk-taking as well as developing an entrepreneurial culture in Australia.