Changing the Criteria of ‘Ineligible Activities’ in the Income Tax Assessment Act 1997

Encouraging venture capital investment in FinTech

We welcome the opportunity to comment on this important proposal to encourage venture capital investment in the FinTech sector.

The IPA Deakin University SME Research Partnership has been very supportive of policy to develop the venture capital sector in Australia, which we believe to be underdeveloped.  Our policy recommendations can be found in the Small Business White Paper launched in 2015,

https://www.publicaccountants.org.au/whitepaper

In order to assess which activities may be considered ‘ineligible’ we have compared a selection of definitions and activities of FinTech from various jurisdictions around the world.

Our submission provides recommendations on modifications that should be made to the definition of ‘ineligible activities’ in the Income Tax Assessment Act 1997.  This will have the effect of capturing a broader range of financial activities which have been impacted by the application of technology. 

Accordingly, this range of FinTech activities (see Appendix B) suggest that the ineligible activities for venture capital investment currently listed in Section 118.425 of the Income Tax Assessment Act 1997 is out of date.  Appropriate amendments will ensure that the legislation reflects market developments and Government policy to encourage venture capital investment in the FinTech sector. 

To view our submission, please click here.

If you would like further information or to discuss any aspect of our submission then please don’t hesitate to contact Vicki Stylianou, on either vicki.stylianou@publicaccountants.org.au or on 0419 942 733.

Yours faithfully

Vicki Stylianou

IPA Executive General Manager, Advocacy & Technical