One very interesting item contained in the 21 Federal Budget papers is the proposed Patent Box tax incentives. The government has stated they will be targeted to medical and biotech and also state that they are considering extending it to "green technology".

ADN and shareholders need to lobby their federal members and the commonwealth government to include green-tech innovation!

The below is an extract from https://www.smartcompany.com.au/budget-2021/budget-patent-box-scheme-medtech-biotech-investment/

Budget 2021: $206.4 million ‘patent box’ scheme to encourage medtech and biotech investment

The federal government has pledged $206.4 million for a so-called ‘patent box’ tax incentive scheme, designed to encourage investment in medical and biotech innovation.

Income derived from Australian medical and biotech patents that are Australian-owned and have been developed locally will be taxed at a concessional rate of 17%.

That’s considerably lower than the standard 30% corporate income tax rate, or the 25% rate for SMEs.

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 at 7.30pm on Tuesday, May 11.

It is only available for patents that have been granted.

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%.

The patent box scheme is intended to encourage businesses to keep their R&D activities in Australia, and to keep patents registered here.

The requirement of organisations to develop their patents in Australia is designed to encourage additional investment in R&D activity, to boost hiring in the sector, and to encourage further application of the innovations in Australia.

The government will consult with industry before finalising the design of the patent box program, the budget papers noted.

It will also consult as to whether the measure could also be used to encourage innovation in ‘clean technology’, however, there are few details on what that consultation would involve, or any time frame.