Treasury has kicked off a new review of Australia’s start-up tax laws after scrapping a discussion initiated by the former Labor government last August.
The agency unveiled its new review today, inviting expressions of interest for two weeks of industry consultations, and public submissions on a series of open-ended questions.
Australia’s ESS laws have have been a bugbear for start-ups for years.
Rules introduced in 2009 required employees to be taxed on share options when they receive them, potentially forcing cash-strapped employees to prematurely exercise their options and sell their shares.
Entrepreneurs and investors have also criticised the complexity of Australia’s ESS, which often involve accountants, lawyers and a great deal of cost to implement.
Last July, then-shadow treasurer Joe Hockey promised that a Coalition government would wind back the 2009 changes in its first term if elected, while Communications Minister Malcolm Turnbull said in an online Q&A last week that Australia needed to “[rectify] the anomalous treatment of employee shares and options” to encourage innovators to stay onshore.
SydStart organiser Pete Cooper welcomed the new review and its broad terms of reference, calling for a greenfields approach rather than changes built on the 2009 regime.
“It’s great that the incoming government has started with a clean slate,” he told Business Insider Australia. “I’m very happy that they’re reopening the discussion and very happy that the terms are broad.”
Stakeholders have until this Friday to register for industry consultations that kick off on 28 January. The new invitation for submissions is open until 7 February.
Under Labor, Treasury had invited the public to comment on a 38-page discussion paper on the administration and tax laws for employee share schemes.
The review was put on ice within days, in anticipation of the September election. Treasury has held off on publishing public submissions since then, pending the new government’s instructions on how the review should proceed.
More information is available from Treasury here.