The Federal Budget announcements could have significant implications for patent owners and the commercialisation of your invention.[1] Biotechnology and medical patents could be eligible for tax benefits under a new “patent box” policy from 1 July 2022.[2]
While profits accrued for SMEs are currently taxed at 25% and for large businesses at 30%, eligible patents will be taxed at a rate of 17% under the patent box policy.[3]
The government considers that the scheme will discourage companies from avoiding domestic taxation by locating income overseas, as well as encouraging greater investment in R&D in Australia.[4]
As the tax benefits are anticipated to be claimable only for granted patents for which an application is made following the Budget announcement[5], this is an exciting opportunity for our clients to take advantage of this new policy. Please contact us for further guidance.
[1] Department of Industry, Innovation and Science (Commonwealth of Australia), Patent Box Policies, (Canberra, Commonwealth of Australia, 2015), https://www.industry.gov.au/sites/default/files/May%202018/document/pdf/patent_box_policies.pdf?acsf_files_redirect
[2] Commonwealth of Australia (Commonwealth of Australia), Budget 2021-22: Tax incentives to support the recovery, (Commonwealth of Australia, 11 May 2021), https://budget.gov.au/2021-22/content/factsheets/download/factsheet_tax.pdf
[3] Ibid.
[4] Department of Industry, Innovation and Science (Commonwealth of Australia), Patent Box Policies, (Canberra, Commonwealth of Australia, 2015), https://www.industry.gov.au/sites/default/files/May%202018/document/pdf/patent_box_policies.pdf?acsf_files_redirect
[5] Commonwealth of Australia (Commonwealth of Australia), Budget 2021-22: Tax incentives to support the recovery, (Commonwealth of Australia, 11 May 2021), https://budget.gov.au/2021-22/content/factsheets/download/factsheet_tax.pdf
