Long term profits for ATX will now be taxed at 17%. “A limited...

Long term profits for ATX will now be taxed at 17%.

“A limited patent box scheme will be launched by the federal government, offering tax breaks for medical and biotech innovations in an effort to boost commercialisation and retain IP in Australia.The federal budget, handed down by Treasurer Josh Frydenberg on Tuesday night, included the establishment of a patent box scheme targeted specifically at medical and biotechnology patents, with the government to also considering including the clean energy sector.Under the patent box, corporate income derived from these patents would be taxed at an effective corporate tax rate of 17 per cent, down from the current rate of 30 per cent for a large business and 25 per cent for an SME.“We want to see more innovation commercialised in Australia. 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,” Mr Frydenberg said in his budget night speech.“Australia’s effective management of COVID makes us an even more attractive place for the best and brightest from around the world.”The patent box will be launched from July next year and cost the government an estimated $100 million annually.The government will also consult with industry before finalising the final design of the patent box next year.“The requirement for domestic development will encourage additional investment and hiring in research and development activity and encourage companies to develop and apply their innovations in Australia,” the budget papers said.“The patent box will offer a competitive tax rate for profits generated from Australian-owned and developed patents.”The Board of Taxation will also conduct a review of the administrative framework of the broader research and development tax incentive (RDTI) by the end of this year.”