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Fighting IP migration with tax incentives – An Australian patent box regime


As a result of difficulties associated with arm’s length valuation of intangible assets, MNEs tend to distort intellectual property location in favour of low-tax jurisdictions. A number of nations have implemented so-called “patent box” incentives to combat this behaviour and to attract and retain IP within their taxing jurisdictions. While such measures may be effective in attracting IP, there are significant questions as to whether they can achieve a net benefit for the taxing nation over the long term. In addition, some entities have labelled these measures a “harmful tax practice”. Given this response, the Australian Government may be inclined to delay consideration of such a proposal. However, such inaction could be to the detriment of the Australian economy and corporate tax base.

Author profile

Matthew McLean
Matthew is a leading tax specialist with Australia’s pre-eminent intellectual property firm, Griffith Hack. Matthew works alongside patent attorneys, lawyers, valuation professionals and taxation experts to provide specialised advice tailored to assist businesses to create, protect, manage and commercialise all aspects of their investment in IP. Matthew’s major areas of expertise include tax incentives for R&D and innovation, and transfer pricing aspects of IP. Matthew also advises on a range of other IP-related tax considerations and issues.
Current at 1 April 2015
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