CFO Take: Australia's startup tax bill lands next week. Model R&D and CGT now
By Akram El-Karrar, CPA, Fractional CFO, founder of OmniScope360 · What happened
Startup Daily reported on 23 October 2026 that Federal Treasurer Jim Chalmers will take legislation covering startup capital gains tax (CGT) concessions, R&D Tax Incentive changes and expanded venture capital incentives to parliament next week. He confirmed it in a speech at the Citi A50 Australian Economic Forum in Sydney.
For any founder with Australian operations or investors, the rules that shape after-tax returns and refundable cash are about to become law, or fail in the Senate.
The figures, as reported
- The revised startup CGT carve-out, the Innovative Business CGT Concession (IBCC), cuts the minimum holding period for eligible shares from five years to three.
- The proposed $10 million lifetime cap was scrapped, and company eligibility extends from 10 years to 15.
- The IBCC keeps a 50% discount for qualifying early-stage investments, subject to innovation requirements and a $50 million turnover threshold.
- Chalmers said better targeting of the R&D Tax Incentive unlocks "an extra $400 million in R&D by young firms every year". Startup Daily notes this is the government's estimate, not a new grants allocation.
- The September draft proposed the R&D changes from July 2028, with a $50 million turnover threshold for refundable offsets.
- The venture capital proposals lift the maximum size of ESVCLP funds from $200 million to $270 million from July 2027.
Source: Startup Daily, 23 October 2026.
The CFO reading
This is a cash-timing story, not a headline-rate story. The CGT concession helps your investors and early employees at exit, which makes your equity easier to sell. The R&D changes hit your balance sheet sooner and harder.
The Tech Council of Australia argued that removing supporting R&D activities from eligible expenditure could outweigh higher offsets for core research, especially for software, AI and deep tech. It also opposed limiting refundable offsets to businesses operating for less than 10 years. If your product work is mostly supporting activity, your refund could shrink even while the headline offset rises.
Startup Daily also says the speech did not settle those remaining concerns, and the bill may still need the Senate and cross-bench. Do not book a refund that depends on rules that are not yet law. Plan on the current rules and treat the changes as a scenario.
What to do this month
- Split your R&D spend into core and supporting activities, so you can see what the new eligibility would do to your refund.
- Build two cash forecast cases: current rules and the proposed rules. Keep any refund out of your base-case runway until the bill passes.
- Check your company's age against the 10-year and 15-year thresholds, and your turnover against $50 million.
- Record the dates shares were issued, so you can see which holders could reach the three-year holding period.
- Tell your investors which case your plan uses, before they ask.
Next step
Start with the R&D guide: https://omniscope360.com/rd-tax-incentive-startups/ and the forecasting guide: https://omniscope360.com/cash-flow-forecasting/
If you want the two cases built for your company, book a free first call: https://omniscope360.com/book/
FAQ
Is the startup tax legislation already law?
No. Startup Daily reported on 23 October 2026 that Chalmers said the Bill will go to parliament next week. It also noted the government may need the Senate and cross-bench to pass it.
Should I count the R&D refund in my cash forecast?
Keep any refund that depends on the proposed changes out of your base case until it is legislated. Model it as a separate scenario so you can see the runway difference.
Where do these figures come from?
From Startup Daily, published 23 October 2026: https://www.startupdaily.net/topic/politics-news-analysis/the-treasurer-says-the-new-startup-tax-rules-will-drop-next-week/