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.
First, a bit of information about Precision for Medicine. We are more than just a Contract Research Organization and have a comprehensive suite of capabilities to support the spectrum of biopharmaceutical companies’ needs across the drug development lifecycle. We are excited to share later on in this article what services we can provide locally in Australia, which will help Sponsors (Biotech and Pharma) take advantage of the AUS R&D tax incentive program.
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
Now, let’s dive back into the information we have to share. 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 (here). 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. If you wish to learn more about Precision Australian RSP status, please click here.
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 about this here on their website.
BD Callout box quote: “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.
Please note, R&D tax credit programs are available in European Union and North American countries where Precision for Medicine also operates laboratory and clinical trial services.
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.
SYDNEY, AUSTRALIA – 08 February 2023 — Precision for Medicine, the first biomarker-driven clinical development organization supporting life sciences companies in the use of biomarkers essential to targeting patient treatments more precisely and effectively, today announced that it has received the Research Service Provider (RSP) status approval from the department of Industry, Science and Resources in Australia.
The Australian R&D tax incentive program (R&DTI) gives registered eligible research-based Australian companies, incorporated in Australia, the ability to claim tax relief on costs generated in R&D activities outsourced to Precision for Medicine Australia.
With this newly approved RSP status, the Australian government recognized Precision for Medicine Australia as an organization capable of providing scientific and technical expertise in Clinical Sciences and able to provide expert resources to perform R&D on behalf of sponsors companies.
Andrea Cotton-Berry, Precision for Medicine’s Global Head of Strategic Development, commented: “We are thrilled to receive this status approval as it allows our current and future clients in Australia to benefit from a tax relief of up to 43.5 % of their R&D expenditure committed to Precision for Medicine Australia.”
About Precision for Medicine
Precision for Medicine supports life sciences companies in the use of biomarkers essential to targeting patient treatments more precisely and effectively. Precision applies novel biomarker approaches to clinical research that take advantage of the latest advancements in science and technology, focusing predominantly on genomics, immune-response assays, global specimen logistics, biomarker analytics, companion diagnostics, and clinical trial execution. Precision for Medicine is part of Precision Medicine Group, with over 3,000 employees in 40 locations across North America, Europe and APAC. For more information, visit precisionformedicine.com.
Estelle Roger is a senior program manager at Precision Medicine Group and supports strategies related to public funding of research and innovation. With more than 5 years building and managing R&D Tax incentives strategies for both CROs and pharmaceutical industries, Estelle’s expertise covers a meaningful panel of R&D tax relief regimes across North America and Europe.