Private ruling: Early-stage innovation company
Date of advice: 8 May 2026
Published: 20 July 2026
Ruling period: x to 30 June 20XX
Date scheme commenced: x

Ruling: Q1: Does the Company qualify as an Early Stage Innovation Company (ESIC) under Division 360 of the Income Tax Assessment Act 1997 (ITAA 1997) for the period 20XX to 30 June 20XX, in respect of issuing new shares to investors? | A1: Yes.

Relevant facts and circumstances: Early Stage Test 1. The Company is an Australian proprietary company incorporated on XX date. 2. The Company is registered for GST from date YY. 3. The Company has no wholly or partly owned subsidiaries. The Company is not part of an income tax consolidated group. 4. For the financial year ended 30 June 20XX, the Company had X assessable income and X expenditure 5. The Company's equity interests are not listed for quotation in the official list of any stock exchange, either in Australia or a foreign country. 6. The Company does not intend to list its equity interests before or immediately after the proposed issue of shares. Background Facts 7. The Company's founders comprise individuals with responsibility for business development and strategy, engagement, technology and product development, and design and user experience. 8. 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 20XX, and on or before 30 June 20XX. 9. The Company is proposing to issue equity interests to investors during the ruling period. Product Development 10. The Company is developing a discovery and engagement platform (the Platform). 11. The Platform is intended to bring together several functions, including discovery, profile building, content enrichment, and embedded third-party booking and workflows. Work undertaken to date to develop the innovation 12. Development activity commenced in 20XX. 13. A design and prototype work for the Platform has been completed. 14. A minimum viable product has been developed. 15. The minimum viable product is undergoing internal testing. 16. The Company intends to commence some user boarding prior to broader commercialisation. Remaining development steps and expected timeframes 17. Commercialisation of the Platform has not commenced. 18. Further work is required before commercialisation, including completion of internal testing and initial onboarding. 19. Commercialisation is intended to commence, initially in one Australian city, followed by expansion to other Australian cities. Commercialisation Strategy 20. The Company's initial commercial focus is intended to be onboarding venues in its initial launch city. 21. The Company advised it has generated venue interest through direct engagement and intends to reach end users through digital marketing. High Growth Potential 22. The Company's growth strategy is based on scaling venue onboarding and user acquisition in Australia, with a stated intention to expand to additional domestic and overseas markets. 23. The Company provided financial modelling projecting growth in venue uptake and recurring revenue over a 24-month period. Scale up the Business 24. The Platform is intended to be delivered digitally and is capable of being expanded. 25. The Company's scaling approach includes expansion details. Broader than Local Market 26. The Company advised the Platform is intended to operate beyond a local market. The Company intends to expand nationally and later internationally. Competitive Advantages 27. There is not a direct competitor offering the same integrated end-to-end service. The Company identified that other market participants offer parts of the functionality. 28. The Company's intended differentiation includes combining discovery, content enrichment and conversion workflows in one platform, together with a focus on building a trusted brand. Not a foreign company 29. The Company is not a foreign company within the meaning of the Corporations Act 2001 (Cth). Conclusion 30. The Company meets the eligibility criteria of an ESIC under subsection 360-40(1) of the Income Tax Assessment Act 1997 for the period starting 1 September 20XX and ending 30 June 20XX.

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


Does IVA apply to this private ruling?: Part IVA of the Income Tax Assessment Act 1936 contains anti-avoidance rules that can apply in certain circumstances where you or another taxpayer obtains a tax benefit, imputation benefit or diverted profits tax benefit in connection with an arrangement. | If Part IVA applies, the tax benefit or imputation benefit can be cancelled (for example, by disallowing a deduction that was otherwise allowable) or you or another taxpayer could be liable to the diverted profits tax. | We have not fully considered the application of Part IVA to the arrangement you asked us to rule on, or to an associated or wider arrangement of which that arrangement is part. | If you want us to rule on whether Part IVA applies, we will need to obtain and consider all the facts about the arrangement which are relevant to determining whether Part IVA may apply. | For more information on Part IVA, go to our website ato.gov.au/gaar .