On 11 May 2021, the Australian Government announced that it will introduce a patent box for eligible corporate income associated with new patents in the medical and biotechnology sectors. The patent box will apply to companies for income years commencing on or after 1 July 2022.
‘Patent box’ is a generic term for regimes that apply a concessional tax treatment to profits derived from eligible intellectual property (IP). Currently, over 20 jurisdictions, including the UK, Singapore and many European countries have patent boxes or other regimes that offer concessional tax treatments to IP derived profits.
The aim of the Government’s policy is to encourage companies to base their medical and biotechnology research and development (R&D) operations, and commercialise innovation, in Australia and to retain associated patent profits in Australia.
The objective of this discussion paper is to inform the Government’s consideration of the detailed design of the patent box announced in the 2021‑22 Budget.
The discussion paper references the OECD/G20 Forum on Harmful Tax Practice’s (FHTP) framework governing IP regimes, including the OECD’s Base Erosion and Profit Sharing (BEPS) Action 5 minimum standard. Pages 23‑36 of this OECD report may assist you with understanding the framework.
You can submit responses to this consultation up until 16 August 2021. Interested parties are invited to comment on this consultation.
While submissions may be lodged electronically or by post, electronic lodgement is preferred. For accessibility reasons, please submit responses sent via email in a Word or RTF format. An additional PDF version may also be submitted.
All information (including name and address details) contained in submissions will be made available to the public on the Treasury website unless you indicate that you would like all or part of your submission to remain in confidence. Automatically generated confidentiality statements in emails do not suffice for this purpose. Respondents who would like part of their submission to remain in confidence should provide this information marked as such in a separate attachment.
Legal requirements, such as those imposed by the Freedom of Information Act 1982, may affect the confidentiality of your submission.
View our submission guidelines for further information.
How To Respond
Address written submissions to:
Corporate and International Tax Division
PARKES ACT 2600
Phone: Paul Fischer & Simon Winckler +61 2 6263 2832