The Australian Government is introducing a patent box to encourage investment in Australia's biotechnology and medical technology sectors.
The patent box was announced in the Australian Government's Budget 2021–22, which details its economic plan for Australia.
What is the patent box?
The A$206 million patent box scheme will reduce taxes on income from innovative research. Its aim is to encourage businesses to undertake their R&D in Australia, keep patents here and manufacture patented technologies onshore.
The patent box will help bridge the gap to commercialisation, and support businesses to keep the development of their IP and the value they create.
Australia joins more than 20 countries with a patent box, including the UK and France.
How will the scheme work?
From 1 July 2022, income derived from Australian medical and biotech patents will be taxed at a concessional corporate tax rate of 17%.
This is lower than the standard corporate income tax rate of 30%, or 25% for small and medium companies.
Which patents are eligible?
Only granted patents, which were applied for after the Budget 2021–22 announcement, will be eligible. The Australian Government will follow the OECD's guidelines on patent boxes to ensure the patent box meets internationally accepted standards.
Australia's biotech and medtech sectors
Australia has vibrant biotech and medtech sectors. The country is an attractive destination for R&D because the healthcare system is receptive to innovation, research is well funded, and a strong regulatory system protects intellectual property. Australian universities and institutes undertake world-leading research and seek international collaborations.
See how US biotechnology firm Illumina is collaborating with the University of Melbourne and the Victorian Government to set up a A$60 million Genomics Hub in Melbourne.
