Over 18-months in the making, the patent-box rules are expected to go beyond those currently existing worldwide. A number of companies have been rewarded in their efforts with Arthur Sinodinos confirming he will consider these measures. Both bodies would like to have something ready for May.
This issue gained momentum last year with a number of companies (predominantly biotech and IT) publicly announcing they were leaving our shores (largely) in part to our restrictive ESAS rules. Both Hockey and Sinodinos have acknowledged this issue is currently under review.
Last week, a discussion paper was released by the Assistant Treasurer to introduce an Exploration Development Incentive, providing incentives for greenfields minerals exploration activity, with a focus on the small exploration sector. Other sector-based tax incentives are currently in the pipeline, undergoing economic modelling and tailored policy design. Some of these will emerge in the public domain in the lead up to Budget night.
It will be an interesting time for Sinodinos in his first year as Assistant Treasurer as he balances compelling economic arguments with limited budget constraints. It will be equally interesting to observe which incentives are announced before (or on) Budget night and which ones may need to re-position their strategy in the context of the White Paper.