Private ruling: Early stage innovation company eligibility
Date of advice: 28 January 2026
Published: 30 March 2026
Ruling period: XX 20XX to 30 June 20XX
Date scheme commenced: XX 20XX

Ruling: Q1: Does the Company satisfy the requirements to be an early-stage innovation company (ESIC), as determined in accordance with section 360-40(1) of the Income Tax Assessment Act 1997 (the ITAA 1997) for the period XX March 20XX to 30 June 20XX? | A1: Yes

Relevant facts and circumstances: Early Stage Test 1. The Company is an Australian proprietary company incorporated on XX date. 2. The Company has no wholly or partly owned subsidiaries. The Company is not part of an income tax consolidated group. 3. For the financial year ending 30 June 20XX, the Company incurred $XX in expenses and earned $XX in income. 4. The Company is not a foreign company within the meaning of the Corporations Act 2001 (Cth). 5. The Company' equity interests are not listed for quotation in the official list of any stock exchange, either in Australia or a foreign country. Background Facts 6. The Company' founders and directors are Y and Z. 7. The 'test time' for determining if the Company is a qualifying ESIC, will be upon the issue of qualifying shares on a particular date or dates on or after XX March 20XX, and on or before 30 June 20XX. Product Development 8. The Company is developing a new Platform. The Platform introduces significant improvements over existing solutions. Engagement with trial clients and alignment with commercial objectives are documented, showing a genuine focus on commercialisation. 9. The Platform also introduces new technologies and commercial processes that set it apart as documented in the information provided. Addressable market 10. The addressable market for the Company comprises of entities initially within Australia but with clear potential for international expansion. 11. The Platform is significantly improved for this addressable market because it consolidates functions that are otherwise spread across multiple tools and agencies. Structured trials conducted with clients have validated the relevance and applicability of the Platform, further supporting its fit for the addressable market. Research & Development (R&D) stage 12. The Company is in the R&D stage and early-stage commercialisation phase. The team's efforts are concentrated on technical experimentation, model development, and validating prototypes to ensure the Platform's effectiveness and scalability. Current trials 13. Trials are a critical part of the Platform validation process and are necessary to test, refine, and demonstrate the effectiveness of the Platform in real-world business environments. 14. The trials have been conducted with a selected group of clients. Each engagement has been carefully structured as a pilot, with participants providing feedback on the Platform integration with their existing systems. The primary objective of these trials is to collect data and validate the Platform's capabilities. Commercialisation Strategy 15. The Company is genuinely focused on commercialising the Platform. The company has structured its development and operations to support commercial rollout. A team has been established to oversee product development, client onboarding, and go-to-market execution. 16. The Company has invested in certain capabilities to support ongoing development and future commercial expansion. 17. The commercialisation strategy includes: • Continued refinement of the Platform based on trial feedback. • Expansion of pilot programs into paid engagements. • Development of marketing and sales infrastructure to support broader rollout. • Integration with third-party systems to enhance value proposition. 18. The Platform is designed to be intuitive, affordable, and results-driven, making it highly attractive. High Growth Potential 19. The Platform's design and business model position it for rapid growth and scalable revenue generation across a broad and accessible market. Scale up the Business 20. The Company has designed the Platform to be highly scalable, with the ability to serve a growing number of clients without a proportionate increase in operating costs. Broader than Local Market 21. While initial trials have been conducted with Australia, the Platform has been architected to support broader national and international markets. Competitive Advantages 22. The Company has developed the Platform with a clear and sustainable competitive advantage with the Platform's differentiation in its multi-platform deployment features. 23. The Platform's features are not commonly available in existing market, as detailed in the supporting information, providing a strong competitive edge. Conclusion 24. The Company meets the eligibility criteria of an ESIC under subsection 360-40(1) for the period starting XX and ending 30 June 20XX.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 360-40 | Income Tax Assessment Act 1997 section 360-45