The Morrison Government will provide businesses with certainty that investment in clinical trials will be eligible for the Research and Development Tax Incentive (R&D Tax Incentive).
By providing businesses with certainty that phase 0‑III clinical trials are eligible for the R&D Tax Incentive, there will now be a simplified registration process, making it easier and faster for businesses to invest in clinical trials.
The determination, which is being released for public consultation today, will be the first of its kind to be made under the reforms to the R&D Tax Incentive announced in the 2020‑21 Budget.
Treasurer Josh Frydenberg said this is another example of how the Morrison Government is focussed on getting the tax settings right so Australian businesses can continue to invest, create more jobs and innovate.
“Providing certainty gives businesses the confidence to invest in cutting edge research and development which helps to boost productivity and provide highly skilled jobs right across Australia. To complement these changes, the Morrison Government will also introduce a patent box which will tax revenue from medical and biotech innovations at a concessional rate of 17 per cent, helping to ensure new products are commercialised in Australia.” said the Treasurer.
Minister for Industry, Energy and Emissions Reduction Angus Taylor said this builds on the Government’s investments in medical products, which are one of six priority areas under the $1.5 billion Modern Manufacturing Strategy.
“We are backing Australian businesses to invest in the development of new products, and high‑quality manufacturing in medical products, as one of our six National Manufacturing Priorities,” Minister Taylor said.
“Clinical trials are a vital component of the medical products field, and this determination will make it easier for companies to conduct these crucial trials in Australia.”
Minister for Health and Aged Care Greg Hunt said that this builds on the Morrison Government’s record in supporting clinical trials in Australia.
“Under our Clinical Trials Activity initiative, the Government will invest over $614 million over 10 years to increase clinical trial activity in Australia, and this determination will provide further incentive to conduct these valuable trials onshore,” Minister Hunt said.
“Clinical trials gives Australian patients the chance to access cutting edge treatments, that can help save and improve lives, and this is another initiative to increase clinical trial activity in Australia.”
The R&D Tax Incentive encourages businesses to invest more in research and development activities that will benefit the broader Australian economy. In 2019‑20 it was accessed by over 11,000 companies and provided over $2.5 billion in tax offsets. To register, companies must conduct or plan to conduct at least one ‘core R&D activity’.
The first draft determination, Industry Research and Development (Clinical trials, Phase 0, I, II, III for an unapproved therapeutic good) Determination 2021 makes it clear that these clinical trials are eligible activities.
Stakeholders and interested parties can provide feedback on the draft determination on the Consultation Hub until 17 February 2022.