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What do the tax breaks look like for an investor?

What do the tax breaks look like for an investor?

Concerned about taxation? Thankfully taxation laws in Australia are planned to benefit the investors in the country willing to invest some capital in the early stage asset class.

Tax Rebates for Early Stage Investors

Both Australian residents and non-residents are entitled to early stage investor tax incentives. The early stage tax rebate for is usually 20% of the amount used for obtaining qualifying shares. The tax rebate in a financial year is capped at $ 200,000. They can also carry forward tax rebates from the earlier years. But the total amount of Early Stage Investor tax rebate carries forward in each year cannot exceed the amount of $ 200,000.

Sophisticated Investors

Besides the tax incentives for Early stage investors, there are also taxation policies for investors termed as Sophisticated investors under the Corporations Law. These investors are not restricted on the amount that they can invest in ESIC® for an income if they qualify for early stage investor tax incentives. The Early Stage Tax rebate for these investors is capped at $200,000 for each income year.

The tax incentives are different for the investors who are not termed, sophisticated investors. There is a limit on the amount that is invested in obtaining tax incentives. Such investors will not be eligible for early stage investors tax incentives if their total ESIC® investments exceed $50,000.

There are important information and processes involved to obtain tax incentives. Early Stage Investment companies must furnish information related to:

Name and address of the investor

Number of shares issued to the investor

The amount of the shares paid by the investor

Date of the shares issued

Percentage of shares owned by the investor right after the shares were issued

ESIC companies furnish this information to the ATO and this department processes the information to provide tax incentives. The information should be reported on 31 July each year.

Since the introduction of tax incentives by the Australian government on July 1, 2016, taxation and investments have a high importance. Investors are eager to invest their capital in the ESIC® companies and obtain tax incentives. Earlier it was difficult for the investors to part with a high amount for taxes. This reduced their profits and eventually many investors lost interest in investments.

Introducing ESIC® Hub

While understanding taxation is complex, investors can now opt for the services of ESIC® Hub and obtain all the tax incentives that they are eligible for. ESIC® Hub develops the status of companies and turns them ESIC® Ready. Investors can plan out investments and get a 20% rebate on their investments through tax incentives. They can avail tax rebates up to $ 200,000 each year. ESIC® Hub uses ESIC® tools and expertise to facilitate companies become Early Stage Investment companies and offer tax incentives to investors. Now investors across Australia can invest freely, high capital and get returns on their investments. Since the introduction of ESIC®, early stage business is booming while investors need not worry about the taxes levied on them. They can simply focus on their business plans, expand their business and wait for high capital gains. Businesses in all sectors, categories and criterion can invest in ESIC® companies, with a few exceptions. These investors can easily avail tax rebates each year.

ESIC® Hub has revolutionised the taxation field since 2016 when the Australian Government introduced Early Stage Investments. This online platform is multiplying investments with its Early Stage policies promoting capital investment. It was founded in 2016 by Stephen Crowe who has more than 20 years experience in investments and innovation. His aim is to ease the investors and enlighten them with the new taxation policy introduced by the Australian Government on July 1, 2016.

You and Us working together

ESIC® Hub is Australia’s first and only online platform dedicated to serving the needs of the early-stage community. We offer you an effective pathway to efficiently allocate resources by utilising our deep technical knowledge and expertise to ensure client-centric outcomes are achieved.

We look forward to working with you.

Contact Us

T: 61 2 8073 9191

W: www.esichub.com

E: [email protected]

O: 105 Queen St, WOOLLAHRA NSW 2025

200 Queen St, MELBOURNE VIC 3000

P: PO Box 905 WOOLLAHRA NSW 1350

Useful Links

The ESIC predictor can be found on our website on both the ‘What are ESICs’ and ‘Early Stage Company’ pages.

You can also access our contribution here to The Tax Institute journal.

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