Global Daily Tax News, Australia Consults On Various Tax Reform Laws, (Sep 14, 2026)
The Australian Taxation Office has released draft legislation to introduce business tax incentives to support innovation and investment.
First, the draft legislation includes the implementation details for the Innovative Business CGT Concession (IBCC) announced in June.
The Innovative Business CGT Concession will provide individuals, partnerships, and trusts holding eligible shares a choice between a 50 percent discount or indexation and the minimum tax for gains accrued from July 1, 2027.
The draft legislation provides a 15-year eligibility requirement across all firms, alongside the AUD50m turnover and innovation requirements.
Eligible equity must be held for only three years before being sold and investors making use of these arrangements will not be subject to a cap.
The Government will also release a draft legislative instrument to help existing companies to self-assess whether they satisfy the innovation requirements to qualify as an innovative start-up.
Second, the draft legislation includes more detail of the Government's reforms to better target the R&D Tax Incentive from July 1, 2028.
The reforms would:
increase offsets for eligible core R&D activities, by up to around 50 percent, and remove the eligibility of supporting R&D activities;
reduce the intensity threshold for the non-refundable offset to 1.5 percent;
increase the turnover threshold for the refundable offset to AUD50m;
increase the minimum expenditure threshold to AUD50,000; and
increase the maximum expenditure threshold to AUD200m.
The draft legislation provides biotechnology and medical technology firms access to the refundable offset for up to 15 years, in recognition of the longer regulatory approval processes and product development timeframes for these sectors.
Additional exposure draft materials also released by the Government include:
Draft legislation to expand the tax incentives for venture capital from July 1, 2027, to help unlock patient capital for young, expanding firms. Most caps for these programs have not been updated since they were introduced in the 2000s;
Draft legislation to adjust the Fringe Benefits Tax settings for electric vehicles to ensure the treatment remains fiscally sustainable and provides more targeted support for the shift to more affordable electric vehicles;
Draft legislation to provide taxpayers with flexibility to report and pay their Pay As You Go (PAYG) instalments monthly to better reflect real time business and investment activity.
Feedback is being sought on the draft legislation by September 28, 2026.