Private ruling: Early stage innovation company eligibility
Date of advice: 6 April 2026
Published: 29 June 2026
Ruling period: DD MM YYYY to DD MM YYYY
Date scheme commenced: DD MM YYYY

Ruling: Q1: Does the Company meet the criteria of an Early-Stage Innovation Company (ESIC) under subsection 360-40(1) of the Income Tax Assessment Act 1997 for the period DD MM YYYY to DD MM YYYY? | A1: Yes

Relevant facts and circumstances: Background Facts (1) The Company is an Australian proprietary company incorporated in Australia on DD MM YYYY. (2) The Company is not part of an income tax consolidated group and is a single company with no subsidiaries. (3) The Company's Directors are Person A, Person B, Person C and Person D. (4) The Company's registered office and principal place of business is situated in a state or territory in Australia. (5) For the financial year ended 30 June 20XX, the Company had less than $XXXX in expenditure and had less than $XXXX assessable income. (6) 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. (7) The Company is developing its own Intellectual Property. (8) The Company intends to issue shares to investors in the financial year ending 30 June 20XX. Product Development (9) The Company is an innovative organisation and has developed novel technology for the XXX market. (10) The technology is intended to offer a new solution for its current and future customers. Commercialisation Strategy (11) The Company is focused on commercialising its novel and innovative technology. The Company is in the early phases of raising capital and conducting activities to bring its technology to market. (12) The Company's development and commercialisation team are fully committed to the translation of its product ideas into reality and have established a business structure and plan to do so. High Growth Potential (13) The value proposition of the Company's product addresses a local and international readily addressable market opportunity based on research conducted by the Company. (14) The financial projections of the Company show the high growth potential. Scale up the business (15) The Company's business model is scalable and has focussed on national and international commercialisation during development. (16) The Company's processing methods allow large scale and low-cost production. As the Company increases its share of the market or enters into new markets its revenues can be multiplied with minimal increase in operating costs. Broader than Local Market (17) The Company will focus initially on the Australian and international market. (18) The market for the Company's product could potentially increase to multinational or global markets. Competitive Advantages (19) The Company's product is innovative and has significant cost and differential advantages over conventional systems used in the particular industry. (20) The Company has undertaken detailed competitor analysis. (21) The Company has been granted licenses over the patented and other intellectual property (IP) and all new IP will be owned by the Company. (22) The Company's Product has an international addressable market. Information provided: (1) The Company provided the following documents containing detailed information in relation to its product, including: • Private ruling application dated DD MM YYYY. • Response to our Request for Information received DD MM YYYY. (2) We have referred to the information within these documents in applying the relevant tests to the Company's circumstances.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 360-40 | Income Tax Assessment Act 1997 subsection 360-40(1) | Income Tax Assessment Act 1997 paragraph 360-40(1)(e)