PATENT BOX REGIME NEEDED FOR INNOVATIVE AUSTRALIA
The Institute of Public Accountants (IPA) commends the Government on the recently introduced innovation incentives but says these can be enhanced by the introduction of a patent box regime.
“The Government has introduced a suite of measures which will help drive investment, economic growth and jobs in our transitioning economy by encouraging innovation, risk taking and an entrepreneurial culture in Australia.
“These measures include the Tax Incentive for Early Stage Investors which gives concessional tax incentives through a non-refundable tax offset and CGT exemption.
“These are all good steps in the right direction to enhance Australia’s economic growth and future prosperity. However, the introduction of a patent box regime to supplement these initiatives would improve the prospects of intellectual property (IP) created in Australia being developed and exploited here.
“A number of countries including Britain, Ireland, Italy and the Netherlands and others in the OECD offer a lower corporate tax rate for income from IP developed in their respective countries.
“Australian businesses face a challenging set of economic circumstances which can hinder the growth and success of businesses seeking to commercialise IP they have developed.
“Factors including high wage and operating costs, uncompetitive tax rates, limited access to start-up capital drive many businesses to take their IP offshore to countries that are more attractive and supportive by offering preferential tax regimes to attract development and manufacturing.
“Unless Australia introduces similar preferential tax regimes, it runs the risk that the migration of IP and advanced manufacturing will continue to be attracted to low-tax jurisdictions,” said Mr Conway.
These recommendations form part of the IPA’s pre-Budget submission. For more information go to: http://bit.ly/2jxoU7L