The Australian Federal Government announced on 11 May 2021 a tax-based incentive scheme called “patent box”. The scheme allows Australian companies who derive profit from patented technology in the fields of the medical technology and biotechnology to a reduction in the company tax rate from 30% to 17%, or for SMEs a reduction from 25% to 17%.
The scheme has a commencement date of 1 July 2022 and whilst some of the fine print is still yet to be released, the eligibility criteria is:
- The profit must be derived from the patented technology. Profit derived from branding or other marketing is not eligible.
- The technology needs to be medical or biotechnology that is covered by patents filed after 11 May 2021.
- The patents need to be granted in Australia.
The scheme is designed to stimulate R&D and, importantly, stimulate business growth in these sectors. The timeframe to achieve both can vary from company to company.
Businesses with existing patent portfolios can also take advantage of the scheme, provided they meet the criteria. New standard applications could be filed for incremental developments, and innovation patents could be filed before 25 August 2021, after which the innovation application will not be option. BOSH is investigating is whether divisional applications filed after 11May 2021 are eligible.
There are a number of options to help businesses with existing portfolios and BOSH will be making the most of these opportunities for clients in meditech and biotech.
The Federal Government is also considering whether the scheme can be extended to cover other technology sections, including clean technology. Bosh will keep you updated.
Attached is a link the announcement Budget.gov.au | 2021-22 Budget
If you would like to find out more about Patent Box, please get in touch with our team.