30 Mar Low-emissions tech sector eyes tax break
Developers of low-emissions technologies and other innovators may win tax breaks in the upcoming budget after months of lobbying.
The aim is to attract investment and avoid a brain drain by encouraging businesses to do their R&D in Australia and keep intellectual property here.
The “patent box” arrangements for medical and biotechnology firms announced in last year’s budget could be extended after extensive Treasury-led consultation over the past year, participants say.
KPMG Partner Alia Lum said on Monday the consultations explored extending the patent box preferential tax regime into low-emissions technologies.
“We would like to see this being included in the budget to encourage further innovation into this sector,” Ms Lum said.
When legislated, income from Australian patents would be taxed at a concessional rate of 17 per cent, rather than the headline rate of 30 per cent for large businesses and 25 per cent for small to medium enterprises.
The Business Council of Australia has called for the preferential tax treatment to be extended even further to attract the private investment needed for economic recovery.
Clean energy, mining technology including critical minerals, food and beverage technology, and computer software development should all be included, BCA says.
Singapore, the United Kingdom and many European countries already have similar laws that offer concessional tax treatments to IP-derived profits.
The Group of Eight universities support extending the patent box beyond medtech and biotech, but warned during talks that the move could entrench the R&D superiority of larger firms rather than help startups.
High emitters, including the power grid, heavy transport, manufacturing, construction and resources companies, all require new technology to help meet net zero emission pledges.
(Australian Associated Press)