In a welcome boost for Australian innovators in biotech
and medical technologies, the Australian government has announced
the introduction of a new patent box scheme which will come into
effect on 1 July 2022.
Patent box schemes of different forms are currently available to
innovators in over twenty countries including many European
countries. The general concept of a patent box scheme is to
encourage innovation by applying a lower rate of corporate tax to
any profits made from patented inventions.
The Australian government is introducing a patent box to
encourage businesses to undertake R&D and keep patents in
Australia. The patent box will tax income derived from Australian
medical and biotech patents at a 17 per cent effective concessional
corporate tax rate. Normally corporate income is taxed at 30 per
cent or 25 per cent for SMEs.
