The Treasury Laws Amendment (2018 Measures No. 2) Bill 2018 (Cth) (Bill) has been introduced into Parliament and received its second reading speech on 8 February 2018. The Bill, if passed, proposes to enhance the regulatory sandbox (Schedule 1) and amend venture capital and early stage investor tax concession provisions (Schedule 2).
The enhanced regulatory sandbox will allow more new businesses to test a wider range of financial and credit products and services without the appropriate financial services or credit licence from ASIC, and for a longer period of time compared to the current sandbox. The sandbox is being enhanced to ensure that it evolves in parallel with the market and to adequately support innovative fintech businesses while maintaining consumer protection for investors.
Schedule 2 partly implements the Treasurer’s announced measures to expand tax incentives for early stage investors and new arrangements for venture capital limited partnerships as part of the National Innovation and Science Agenda. The proposed changes amend the venture capital and early stage investor provisions relating to capital gains tax transactions, managed investment trusts and the early stage investor tax offset to ensure that the provisions operate as intended. Venture capital is crucial to fintech businesses, particularly at the seed, start up and early-expansion stages of commercialisation that would otherwise have difficulty in attracting investment.