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Incentives for Conducting Clinical Trials in Australia

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If you are considering Australia for your clinical trials, did you know you may be eligible for a partial cash refund or tax offset through the Australian Government’s Research and Development (R&D) Tax Incentive Program?

We help those who are considering Australia for clinical trials navigate Australia’s tax system to ensure you maximise your benefit and minimise your risk.

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    What are the benefits of undertaking clinical trials in Australia?

    If you are thinking of conducting clinical trials in Australia you may already know of the high-quality research facilities available, alongside the pragmatic and efficient regulatory framework. Australia’s health care system is not dissimilar to that of the rest of the Western World, so it makes like-for-like comparisons straightforward.

    Crucially, clinical trials in Australia are extremely cost effective. Firstly, the Australian dollar often makes the cost of a trial more affordable than if it had been undertaken in the home country of the pharmaceutical company. The R&D tax incentive program provides further relief by offering an up to 43.5% cash refund for the cost of the clinical trial.

    For example, if you have established your Australian presence and your Australian clinical trial costs AUD$1,000,000 in 2020:

    The example above assumes that the Australian entity is eligible for the 43.5% cash refund – this is available where global group turnover is AUD$20,000,000 or less.

    How can I ensure my Australian clinical trial is eligible for the cash refund or tax offset?

    There are certain criteria to ensure your clinical trial is eligible for the Australian R&D tax incentive. Companies looking to create a presence here in Australia will satisfy the first step to eligibility. This is necessary as the program runs through the Australian taxation system. Other issues relevant to eligibility and the refund or tax offset due include:

    • Ownership structure
    • Governance of the Australian entity
    • IP ownership
    • Funding options
    • Exit strategy

    Glasshouse Advisory can assist you in working your way through these eligibility matters.

    Our international client model

    We have a suggested legal, entity and transactional structure that will minimise your upfront outlay in Australia, minimise tax risk and maximise your R&D refund. We will tailor the approach to fit your needs. Please contact us if you would further details.

    Glasshouse Advisory’s model to assist you in accessing the R&D tax credits

    Stage 1 - Strategic planning
    • We will work with you to assess eligibility to the R&D incentive program based on your needs
    • We will tailor a plan for your business
    Stage 2 - Establish an Australian entity
    • We will take all the steps necessary to incorporate your Australian entity
    • Undertake necessary registrations with registered bodies
    • Liaise with your chosen company director to ensure requirements are met
    Stage 3 – Demonstrate Commercial Rationale of Arrangements
    • Undertake economic analysis to substantiate a commercial rationale for activities in Australia and inter-company payment structure
    Stage 4 - Intercompany agreements
    • Drafting of intercompany agreements:

                - R&D services agreement

                - Any loan agreement

    Can be prepared as legal agreements by our lawyers if required

    Stage 5 - R&D claim preparation
    • R&D tax claim preparation
    • Liaison with your chosen tax accountant for your annual company tax return
    Stage 6 - Overseas finding (if required)
    • Preparation, lodgement and defence of an overseas finding to facilitate Australian R&D tax incentive payment
    Stage 7 - Annual R&D claim
    • Annual preparation of R&D tax claim for as long as costs are incurred in Australia for clinical trial work

    Services

    Glasshouse Advisory offers the following services necessary to claim the R&D tax incentive:

    • Establishment of an Australian entity including all necessary registrations
    • Commercial rationale to reduce Australian tax risk
    • Annual R&D tax claim preparation
    • Overseas findings to include international costs in Australian R&D claim
    • Intercompany or legal agreements in conjunction with legal advisors
    • Valuation of your intellectual property 

    We can also provide recommendations for the following services:

    • Financial and tax accountants
    • Company Directors

    We work with these services providers consistently and know they offer quality services and value for money.

    The above represent the full range of services required to ensure your clinical trail reaps the benefit of the Australian R&D tax incentive program.

    Our experience – your team

    We have a team of R&D and tax experts to ensure your business benefits from the R&D tax incentive program in Australia. The team has deep experience in undertaking these projects with a history of successes.

    Our R&D team has a 100% audit record. Glasshouse Advisory’s detailed lodgement methodology and substantiation process has led to an excellent reputation with the ATO and AusIndustry. We will maximise your claim without exposure to unwanted risk.

    We are uniquely placed in the market to assist you in setting up your Australian business, minimising your Australian tax risk and undertaking your annual R&D returns.

    Please do contact us so we can take you through the process and tailor a plan for your business.

    Contact our advisory experts to identify new opportunities for your business

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