AusBiotech makes submission on tax impediments for small business

Trade group AusBiotech has made a submission to the Australian Board of Taxation, which is conducting a review to identify features in the tax system that are hindering or preventing small businesses from reaching their commercial goals.

This AusBiotech submission identifies and discusses two tax schemes that discriminate against small business: Employee Share Schemes (ESS) and the recently announced changes to the Research and Development (R&D) Tax Incentive legislation. AusBiotech also noted two new tax measures that if implemented would be of assistance to small and start-up technology companies.

Changes made to the ESS in 2009 introduced a disincentive to staff by moving to compulsory taxation of shares and options prior to the realization of any value. As a result, the majority of companies deserted the scheme. The requirement for valuations of pre-revenue technology companies also provides an unnecessary impost on small business and is almost meaningless for R&D companies. AusBiotech urged that the 2009 changes be repealed.