Tag: tax

A patent box tax concession for Australia

Research Australia welcomed the Government’s announcement in the May 2021 Budget that it would introduce a patent box tax concession for the medical and biotechnology sector. As part of the further development of this proposal, the Australian Treasury has issued a consultation paper, outlining the key features. Research Australia’s response addresses several major concerns with the proposal including the focus on incentivising licensing but not manufacturing, and limiting eligibility to patents granted in Australia.

We are working with our membership and other key stakeholders across the sector, and look forward to engaging further with Treasury as the development of the patent box continues.

Research Australia’s submission is available here.

Changes to R&D Tax Incentive opposed

Research Australia has used its submission to a Senate Inquiry to argue against the latest round of changes to the R&D Tax Incentive that have been proposed by the Government.

The changes contained in the Treasury Laws Amendment (Research and Development Tax Incentive) Bill 2019 are largely the same as the changes the Senate rejected early last year. Research Australia believes the changes are poorly designed and will significantly reduce R&D in the health sector. With expenditure on the R&D Tax Incentive Scheme having fallen dramatically in the last couple of years and with Government support for R&D at an historic low, Research Australia has urged the Senate Committee to reject the changes again.

Research Austrlaia’s submission is available here.

The submission of an alliance of seven groups from across the health and medical research and innovation sector, including Research Austrlaia, is available here.

The Committee’s final report has been delayed and is now to be tabled in the Senate on 24 August.

Research Australia opposes cuts to R&D Tax Incentive

In the May 2018 Budget the Government  proposed a series of changes to the R&D Tax Incentive which would further reduce the support it provides to private sector R&D activity. While advocacy by Research Australia and others has succeeded in having clinical trial expenditure by small companies exempted form the cuts, several of the other changes remain a concern. Research Australia’s submission to the Senate Inquiry on the new legislation has put the case for why the cuts should be rejected by the Senate.

Research Australia’s submission

On 11 February 2019, the Senate Committee handed down its report. It recommended that ” that the Senate defer consideration of the bill until further examination and analysis of the impact of schedules 1–3 is undertaken. In particular, the committee recommends that:
• the approach to the cap on the refundable portion of the Research and Development (R&D) tax incentive is refined, noting investment decisions already taken; and
• the formula for R&D intensity is refined, noting inherent differences in R&D intensity across industries and impacts on businesses with large operating costs.”

Research Australia welcomes the decision and is pleased the legislation is not proceeding in its current form.

 

Amendments to the R&D Tax Incentive

Research Australia has made a submission in response to the draft amendments to the R&D Tax Incentive legislation, the latest round of changes since the legislation commenced seven years ago. Research Australia’s submission addresses two key issues.

The  first is our concern that the definition of clinical trial is not broad enough to ensure the exemption from the $4 million cap on R&D expenditure will apply to all clinical trials activity, particularly for medical devices. We have worked with other peak bodies, including Ausbiotech and BioMelbourne Network, to propose an alternative and more inclusive definition.

The second main concern relates to the proposed reduction in the rate of the R&D Tax Incentive. For early stage companies seeking to commercialise new pharmaceuticals, biotechnologies and devices, this has the effect of directly reducing their cashflow at a critical stage in their development. Research Australia has opposed the rate reduction.

Research Australia’s submission

Research & Development Tax Incentive

Joint statement on the Research & Development Tax Incentive

Don’t rip the guts out of Australian medical research commercialisation

Commercialisation of Australian medical research is under serious threat if the package of measures put by the ‘Ferris, Finkel, Fraser’ Review of the Research & Development (R&D) Tax Incentive is adopted and Australia’s medical technology, biotechnology, and pharmaceutical (MTP) sector is urging the Federal Government not to devastate Australia’s most innovative industry.

The R&D Tax Incentive is the most critical centre-piece program in the translation of Australia’s world-class research into treatments, cures, diagnostics, medical devices and vaccines. The program has been successful in helping attract more investment in R&D and fostering a strong Australian life sciences clinical trials and R&D sector.
Continue reading “Research & Development Tax Incentive”

R&D Tax Incentive – Response to the Review

Research Australia has made two submissions into the federal government’s R&D Tax Incentive review.

R&D Tax Incentive Submission 2016

R&D Tax Incentive Submission 2015

Research Australia supports the report’s recommendations to:

  • maintain the current eligibility criteria
  • introduce an incentive to encourage collaboration with publicly funded researchers
  • to release more information about claimants.

Research Australia has opposed the application of a new $2 million cap to small caps that are seeking to commercialise HMR and proposed a modification to a recommendation that would limit the R&D Tax Incentive to more research intensive companies.

The Government will now consider the recommendations of the Review together with the responses from the public consultation and then formulate its response, which is expected to be subject to another round of consultation, probably early next year.

R&D Tax Incentive Review

As part of the National Innovation & Science Agenda, the Government has commissioned Innovation and Science Australia to undertake a review of the R&D Tax Incentive.

While Research Australia proposed some possible minor amendments to the R&D Tax Incentive, we argued that on the whole the R&D Tax Incentive is already performing well against the Review’s criteria of effectiveness, integrity and encouraging additional R&D. Any changes to the R&D Tax Incentive at this point in time should be limited to improving the way it is administered.

R&D Tax Incentive Review