20170616 fintech forum presentation - slides - final[1 ... · •a company to qualify as an esic...
TRANSCRIPT
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Fintech Forum
Melbourne21June2017
BrettChallansDirector,InnovationsTaxAustralianTaxationOffice
(08)74222382
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AdministrationofInnovationProgrammes
• AusIndustryandtheAustralianTaxationOfficehavejointadministrationof:• R&DTaxIncentiveProgramme• VCLPsandESVCLPs
• TheATOhassoleresponsibilityfortheadministrationoftheESICProgramme
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Research&Development
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Co-AdministrationoftheR&DProgramme
• FortheR&DTaxIncentive
• AusIndustryhasresponsibilityforR&Dactivities
• TheAustralianTaxationOfficehasresponsibilityfortheexpenditureontheR&Dactivities
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JointR&DComplianceStrategy• JointRiskApproach
• Fraud•OrdinarybusinessactivitiesversuseligibleR&Dactivities• SoftwareDevelopment•Agriculturalclaims•Mining• Buildingexemptionclaims(s355-225oftheITAA1997)• Consultants
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JointComplianceStrategycont…
• Jointeducation
• Co-brandedpublications
• Jointcomplianceactivities
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JointTaxpayerAlerts• TA2015/3AccessingtheR&DTaxIncentiveforineligible
broadacre farmingactivities
• TA2017/2ClaimingtheResearchandDevelopmentTaxIncentiveforconstructionactivities
• TA2017/3ClaimingtheResearchandDevelopmentTaxIncentiveforordinarybusinessactivities
• TA2017/4ClaimingtheResearchandDevelopmentTaxIncentiveforagriculturalactivities
• TA2017/5ClaimingtheResearchandDevelopmentTaxIncentiveforsoftwaredevelopmentactivities
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TheReviewoftheR&DTaxIncentive– 3FsReview
• ReviewPanel– MrBillFerrisAO(Chair),DrAlanFinkelAO,MrJohnFraser
• ReportprovidedtoGovernmentinApril2016andreleasedforpublicconsultationon28September2016
• TheGovernmentisyettorespondtotheReport• Reviewhighlights– LargestcomponentoftheAustraliangovernmentsupportforinnovation
– Significantgrowthisplacingincreasingstrainontheadministrativeandcompliancemodelfortheprogramme
– Theprogrammeshouldbeunderpinnedbystrongintegritymeasurestopreservethecredibilityofthetaxsystem
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SummaryAllYears
0
1,000,000,000
2,000,000,000
3,000,000,000
4,000,000,000
5,000,000,000
6,000,000,000
7,000,000,000
2012 2013 2014 2015 2016RefundableR&Damount Non-RefundableR&Damount
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R&DClaimsbyState
0
500,000,000
1,000,000,000
1,500,000,000
2,000,000,000
2,500,000,000
3,000,000,000
2012
2013
2014
2015
2016
2012
2013
2014
2015
2016
2012
2013
2014
2015
2016
2012
2013
2014
2015
2016
2012
2013
2014
2015
2016
2012
2013
2014
2015
2016
2012
2013
2014
2015
2016
2012
2013
2014
2015
2016
ACT NSW NT QLD SA TAS VIC WA
RefundableR&Damount Non-RefundableR&Damount
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R&DExpenditure• RefundableR&DTaxOffset– 43.5%ofR&Dexpenditurewhereaggregatedturnoverislessthan$20m
• Non-refundableR&DTaxOffset– 38.5%ofR&Dexpenditurewhereaggregatedturnoverisgreaterthan$20m
• Whatisaggregatedturnover?– ConnectedEntities–Affiliates
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R&DExpenditure– KeyPoints• RecordKeeping– OzoneManufacturingPtyLtdvFCofT [2013]AATA420
• ExpendituretoSpecificActivities– TierToysLimitedvFCofT [2014]AATA156
• MethodologyforCalculatingPercentageofTotalCosts
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R&DExpenditure– KeyPointscont…• PaymentstoAssociates– MustbepaidtobeincludedasanotionalR&Ddeduction
• Ordinarybusinessactivities(alsoreferredtoasbusinessasusual)
• Excludedexpenditure
• Adjustments– Feedstockadjustments– Clawbackadjustments
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Start-upsundertakingR&D
• Commonmistakesforstartups– FormationexpensesclaimedasR&Dexpenditure– ThewrongentityisundertakingtheR&Dactivity– TheentityundertakingandregisteringtheR&Dactivitiesmustbeacompany
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EarlyStageInnovationCompanies
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TaxIncentivesforinvestors
• Newlyissuedsharesonorafter1July2016
• 20%non-refundablecarry-forwardtaxoffset
• Capitalgainstaxexemptionforinvestors
• NewreportingobligationbyESIConshareissues
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Qualifyingasanearlystageinnovationcompany– companyrequirements
• IncorporatedorregisteredintheAustralianBusinessRegister
• Totalexpensesof$1 millionorlessinthepreviousincomeyear
• Assessableincomeof$200,000orlessinthepreviousincomeyear
• Notlistedonanystockexchange
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Qualifyingasanearlystageinnovationcompany– 2tests
• AcompanytoqualifyasanESICmustsatisfy1of2tests
• Principle-BasedTest– s360-40ITAA1997o5criteria
• 100PointsTest– s360-45ITAA1997o8criteria
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Qualifyingasanearlystageinnovationcompany– Principle-BasedTest
1. Thecompanymustbegenuinelyfocusedondevelopingoneormoreneworsignificantlyimprovedinnovationsforcommercialisation
2. Thebusinessrelatingtothatinnovationmusthaveahighgrowthpotential
3. Thecompanymustdemonstratethatithasthepotentialtobeabletosuccessfullyscaleupthatbusiness
4. Thecompanymustdemonstratethatithasthepotentialtobeabletoaddressabroaderthanlocalmarket,includingglobalmarkets,throughthatbusiness.
5. Thecompanymustdemonstratethatithasthepotentialtobeabletohavecompetitiveadvantagesforthatbusiness.
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Qualifyingasanearlystageinnovationcompany– 100PointsTest
• Acompanymustaccrueatleast100points
• Pointsrangefrom75pointsdownto25points
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PrivateRulingApplications
• PrivateRulingapplications• RulingsonPrincipleBasedTestnotthe100PointTest
• PrivateRulingapplicationsissues• Thestructure• Establishingthattheinnovationisneworsignificantlyimproved
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VentureCapitalLimitedPartnerships(VCLPs)
and
EarlyStageVentureCapitalLimitedPartnerships(ESVCLPs)
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VCLPsandESVCLPs
• Co-administerwithAusIndustry
• BothVCLPsandESVLPsaimtoincreasecapitalinvestmentinAustraliabyprovidingbeneficialtaxtreatmenttoeligibleandlocalforeigninvestors.
• From1July2016,furthertaxincentivesmayapplyforinvestmentsinanESVCLP
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AccessingLosses
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AccessingLosses
NISAAnnouncement• ‘samebusinesstest’willberelaxed
• ‘predominantlysimilarbusinesstest’introduced allowingaccesstolosses,where:– Similarassetsused– Incomegeneratedfromsimilarsources
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GeneralInformation
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GoodTaxGovernance
• 7principlesofgoodtaxgovernance–Professionalandproductiveworkingrelationship–Accountablemanagement&oversight–Recognisetaxrisks– Seekadvice– Integrityinreporting– Timelylodgementsandpayments– Ethicalandresponsiblebehaviour
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GettingHelp
• SeekingadvicefromtheATO
• Earlyengagement
• www.ato.gov.au/business/research-and-development-tax-incentive/
• www.ato.gov.au/general/new-legislation/in-detail/new-tax-incentives-for-early-stage-investors/
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FurtherInformation
• AustralianTaxationOffice– 132866– www.ato.gov.au/randdtaxincentive
• AusIndustry– 132846– www.business.gov.au