The announcement of Federal Budget 2021 last week (11 May 2021) introduced a number of exciting programs and stimulus measures. Two that are particularly relevant to many of our clients are the Digital Games Tax Offset and the Patent Box Tax Regime. While more detail will be forthcoming in the coming months, we have summarised key aspects of these programs.
Digital Games Tax Offset
As part of a $1.2 billion “digital strategy package”, businesses in the digital games industry will be eligible for a 30 per cent tax offset, starting July 1 2022.
Eligible businesses will be required to incur a minimum of $500,000 per game on qualifying Australian games expenditure, while the maximum offset a game developer will be able to claim in each year is $20 million.
Patent Box Tax Regime
Aiming to encourage medical and biotech companies to stay in Australia while they develop and then sell their ideas, the “patent box tax regime” will tax any income from a company’s patent at a concessional rate of 17 per cent starting from July 1 2022.
This has the potential to provide significant benefits to companies with large businesses currently being taxed at 30 per cent and small-to-medium enterprises at 26 per cent.
