Research & Development (R&D) Tax Credits
These tax credits are available to pharmaceutical and biotechnology to incentivize drug development and clinical research in countries around the world. In this article we will discuss Australian R&D tax incentive program (R&DTI), which is part of local government’s key strategy to boost innovation in drug development and support R&D activities in the private sector for the Australian economy.
- Disclaimer: This article has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consult your own tax, legal, and accounting advisors before engaging in any AUS tax credit applications.
Insights into the AUS R&D Tax Incentive Program
AUS Biopharma companies are considered a critical hub of innovative drug development, and the AUS’s R&D tax relief program, also referred as to the R&D Tax Incentive or R&DTI is a targeted, generous, and easily accessed entitlement program to stimulate industry investment and support drug development innovation conducted in the country. Indeed, registered eligible notional deductions (R&D expenses) can be claimed on activities performed throughout the drug development process.
The Australian government has a very helpful website that explains how the process works. In 2020, the Australian Taxation Office issued a R&DTI guide to interpretation assisting R&D eligible entities in accurately selecting registered eligible activities and their associated costs. With regard to its generosity, the R&DTI targeted tax incentive program offers a dual mechanism, either refundable or non-refundable tax offset depending on an aggregated turnover ceiling of $AUD 20M (refundable below and non-refundable above) from R&D entities subjected to corporate tax in Australia. For each entity, and on an annual basis, it is necessary to complete a 5-step process in order to define the amount of eligible R&D allowance. R&DTI popularity is also correlated to the diversity of eligible expenses that can be annually included, from R&D staffing costs to subcontracted R&D to Australian RSP-accredited research organizations.
Precision for Medicine AUS Research Service Provider Status
As the first biomarker-driven clinical development CRO, Precision AUS is highly engaged in innovative research and development and has been approved as a Research Service Provider (RSP) by Industry Innovation and Science Australia and recognized as a specialist organization capable of providing scientific or technical expertise and undertake R&D on behalf of Pharma & Biotech companies. This Australian approved status enables our AUS sponsors to lower their costs of innovation by recovering generated in R&D activities costs outsourced to Precision AUS.
Learn more about Precision Australian RSP status >
AUS R&D entities eligible for tax offset refund
Unlike large companies which are more likely to exceed a $20M AUD celling on an annual basis, Small and Mediums enterprises (SMEs), with less than annual $20M AUD, can claim a refundable offset, the amount of which is fixed by multiplying the notional deduction by their corporate rate plus a 18.5% premium bonus (generally 43,5% for SMEs).
If you are an eligible registered R&D entity, as defined by the Australian government, and want to claim your R&D tax credits as a refund, we encourage you to learn more on their website.
“As a leading AUS CRO, Precision for Medicine is exceptionally positioned to support our AUS BioPharma companies, allowing them to benefit from advantageous local R&D incentives”
— Andrea Cotton-Berry, Global Head, Strategic Development EU, US, and APAC.
AUS Based Services available from Precision for Medicine
Providing customized CRO solutions from late pre-clinical stage all the way through post-launch clinical trials, Precision for Medicine offers a unique partnership to promote innovation in Australia, prioritizing R&D activity development locally and maintaining close collaboration with AUS R&D centers of excellence. Below is a list of available services based out of the AUS.
AUS-based Clinical Trial Research Services
- Study Project Management
- Clinical Operations
- Site Monitoring
- Data Management
- Drug Safety
- Biostatistics
Collaborate with an AUS-based Partner
For innovative biopharma companies looking to tap into AUS R&D tax credits, it will be critical to work with a partner with services and staff in AUS. This is where Precision can support your drug development innovation.
