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Flow through tax incentives to encourage investment in venture capital funds
Pooled Development Funds (PDF)
What do you get?
Tax benefits on the income derived from equity investments.
Who is this for?
Fund managers seeking to invest in a portfolio of venture capital funds, including Early Stage Venture Capital Limited Partnerships and Venture Capital Limited Partnerships.
About the program
The aim of the Pooled Development Funds programme is to increase the supply of capital to Australian small and medium-size enterprises (SMEs).
PDFs are venture capital funds registered under the Pooled Development Funds Act 1992
PDFs and their shareholders receive tax benefits on the income derived from their equity investments. This is to help compensate for the higher risk of investing in SMEs.
PDFs will be taxed at 15% on the income and gains derived from equity investments in Australian SMEs. Shareholders are exempt from tax on the income and gains derived from holding and disposing of PDF shares.
The extent of the above tax benefits depends upon a number of factors. PDFs and their shareholders should seek professional tax advice.
Eligible Investments
What are the eligibility criteria?
Fund managers of a PDF can make eligible investments by acquiring newly-issued shares in SMEs with total assets of not more than $50 million.
The investee company must have issued shares to raise capital to:
- establish a new business activity
- substantially expand production capacity or services
- expand or develop markets
While a PDF holds an investment, it can enter into the following transactions with the investee company:
- acquiring non-transferable options to buy shares
- lending money
- charging management fees
A PDF can't invest in companies whose primary activities are either:
- retail operations
- property development
Need help?
Let us answer your question over the phone, email or live chat.
- Phone:
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Open Hours:
Monday – Friday, 8am – 8pm across Australia
- Website:
Registered companies
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View a list of companies that are registered as PDFs with Innovation and Science Australia
List of Pooled Development Funds