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Tax on patents damages biotech industry

Changes brought about in the tax policy to ease cash flow problems for technology firms selling patents, fails to address a key issue raised by New Zealand’s biotechnology sector. The policy changes also do not take into account the fact that in many cases technology transferred between companies does not result in a successful product.

The legislation assumes that all technologies will result in successfully commercialized products, which is unrealistic. Biotech companies are usually built on a portfolio of technologies and only the most promising leads are developed into applications.

Since most patents do not result in commercially successful products, grabbing a tax bite slows the transfer of intellectual property and cripples the industry.


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