The Australian government's 2021-22 budget released 11 May 2021 announced plans to encourage research through a new patent box regime and also by allowing businesses to self-assess intangible depreciating assets, such as their intellectual property, rather than being required to use the statutory prescribed effective life.
Under income tax law, a depreciating asset is an asset that has a limited effective life and can reasonably be expected to decline in value over time. Unlike tangible assets most intangible assets are not considered to be a depreciating asset. However, intellectual property, such as patents and registered designs, is one exception.
Currently, for the purpose of income tax, intellectual property, such as patents and registered designs, can be depreciated using a method called the prime cost method. Continue Reading