News
“Patent Box” scheme announced to encourage medical and biotech investment
The Government has announced the introduction of a new tax incentive scheme, intended to encourage businesses to keep their R&D activities and patents registered in Australia.
The patent box scheme is one of several budget initiatives designed to encourage innovation and investment and to boost hiring in the sector.
Under the patent box, income earned from new patents that have been developed in Australia will be taxed at a concessional 17 per cent rate — almost half the rate that applies to large companies.
The scheme is set to come into effect from July 1, 2022, and the concession will be available for patents that are applied for after the budget announcement on Tuesday, May 11. It is only available for patents that have been granted.
Further industry consultation will occur before the details of this regime are settled.
The 17% tax rate will also only apply to income derived directly due to the patent. Income from manufacturing, branding and other attributes will be taxed at 30%.
Date published 14 May 2021
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