Australia’s House advances startup CGT and R&D tax package

The Bill now proceeds to the Senate. The House vote is a material legislative milestone, but it creates no present entitlement, filing option or liability unless the Senate agrees and the Bill receives Royal Assent. The official House Hansard records the third-reading division; exact enacted clauses, commencement mechanics and any later amendments remain for the continuing legislative process.^[3]

Startup investment concession

Schedule 1 would establish an Innovative Business Capital Gains Tax Concession. The government describes it as a 50% capital-gains discount for eligible founders, employees and investors disposing of equity investments in innovative businesses. The concession is intended to preserve meaningful relief where early-stage shares begin with a low or nil cost base. Eligibility would depend on the business’s main activities relating to innovation; the Department of Industry, Science and Resources is still developing safe-harbour arrangements, so groups should not yet assume that a technology label or R&D activity is sufficient.^[1][2]

The Schedule would amend the Income Tax Assessment Acts 1936 and 1997, the Income Tax (Transitional Provisions) Act 1997 and the Taxation Administration Act 1953. That makes the proposal relevant to multinational venture investors and Australian startup subsidiaries, but it is an investor-level CGT concession rather than a general reduction in company tax.^[1]

R&D incentive is more generous but narrower

Schedule 2 would reshape the Research and Development Tax Incentive. The government says core R&D offset rates would rise by up to 50%, the turnover ceiling for the refundable offset would increase from A$20 million to A$50 million, and the intensity threshold would fall. Refundability would generally target younger firms, with up to 15 years’ access for eligible biotechnology and medical-technology businesses; older firms would instead retain access through a non-refundable offset. Claims below A$50,000 would need a Research Service Provider or Cooperative Research Centre partnership. A future legislative instrument could designate activities integral to core R&D, following consultation planned for early 2027.^[1][2]

Schedule 3 would separately raise venture-capital incentive thresholds. Schedule 4 would let quarterly PAYG instalment payers elect monthly reporting and payment, while allowing the Commissioner to require monthly instalments from taxpayers with a demonstrated history of non-compliance. Schedule 5 would transition the electric-car FBT concession: the government proposes retaining the full discount for qualifying cars up to A$75,000 from 1 April 2027 to 31 March 2029, then applying a 25% discount against the ordinary 20% statutory-formula rate from 1 April 2029, while preserving treatment attached to earlier qualifying commitments.^[1]

Scenario planning only

MNE groups should map Australian R&D entities by turnover, age, activity and refund position; identify startup equity holdings; and flag quarterly PAYG and electric-vehicle arrangements. Forecasting should remain scenario-based until the Senate outcome, Royal Assent, exact enacted provisions and outstanding instruments settle the final conditions.^[1][2][3]