The Assistant Treasurer Mon 18.2.2013, released the Board of Taxation’s Review of taxation arrangements under the venture capital limited partnerships regime. The Government’s response to this report was announced as part of the Venture Australia package which forms an element of the Government’s Industry and Innovation Statement. The Board’s report is on its website.
The Board of Taxation’s review found that improvements could be made to the operation of the Venture Capital Limited Partnership (VCLP) and Early Stage Venture Capital Limited Partnership (ESVCLP) regimes so they better meet the objective of increasing investment in high risk start-up and expanding businesses in the Australian venture capital sector. Mr Bradbury said the Government has agreed with all of the Board’s recommendations of these reviews in full or in principle.
As part of the Venture Australia package, the Government also announced other changes to the tax treatment of venture capital aimed at increasing investment in Australia’s venture capital industry. These changes form part of the Government’s response to the 2012 Review of Venture Capital and Entrepreneurial Skills. They are:
- lowering the minimum investment capital required for entry into the ESVCLP program from id=”mce_marker”0m to $5m to facilitate increased funding from “angel” investors;
- administering the VCLP and ESVCLP programs as a single regime to provide clearer entry for investors and managers wishing to use these investment vehicles; and
- phasing out the Pooled Development Fund (PDF) program over a number of years in consultation with stakeholders. The PDF program has been closed to new registrants since 2007.
Changes requiring legislative amendments will take effect on Royal Assent.
Source: Assistant Treasurer’s press release No 016, 18 February 2013
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