IT venture capitalists may win in Budget

The federal government hands down its budget tonight and industry commentators have predicted tax concessions for venture capitalists.

Jim Morrison, tax technology partner with Deloitte Touche Tohmatsu, said there had been a concerted effort to put tax breaks for IT startups on the agenda, starting with the Ralph report.

"They [government] may try to do something in terms of incentives to investment and slide it through as part of the budget," Morrison said.

"There will be something to facilitate local investment in venture capital and technology startups," he said.

The current taxation arrangements drive startups offshore, generally to the US, Morrison said, depriving the local economy of hundreds of millions of dollars.

Paul McNab, taxation partner with PricewaterhouseCoopers, said the ATO was due to deliver its ruling on the treatment of Web site expenses, and suggested it may be part of tonight's budget.

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