Australia: KPMG recommendations on capital gains tax reforms
KPMG proposes key refinements to ensure the measure provides effective support.
July 13, 2026
In response to the consultation on the innovative business capital gains tax concession (IBCC), KPMG Australia has submitted the following recommendations to ensure the measure provides effective support:
- Provide flexibility beyond the general 10-year IBCC rule for companies with longer innovation and commercialization timeframes
- Allow businesses to obtain ATO private binding rulings for IBCC eligibility, consistent with the early-stage innovation company approach
- Extend the IBCC to options, not just shares, to support common employee share option plan structures
- Preserve the 50% capital gains tax discount for qualifying pre-July 1, 2027, employee share schemes (ESS) interests under the start-up concession
- Retain the ESS start-up concession, including the 50% capital gains tax discount, for ESS interests acquired on or after July 1, 2027
- Continue capital gains tax discount treatment for general partners carried interest in venture capital limited partnerships and early-stage venture capital limited partnerships, rather than applying indexation from July 1, 2027
- Apply the IBCC benefit cap per investment, rather than over an investor’s lifetime