Private ruling: Early stage innovation company eligibility
Date of advice: 27 May 2026
Published: 10 August 2026
Ruling period: 01 July 20XX to 30 June 20XX
Date scheme commenced: 01 July 20XX

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 (ITAA 1997) for the period 1 July 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 and is not part of an income tax consolidated group. 3. For the financial year ending 30 June 20XX, the Company incurred $XX and earned $XX. 4. 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. Background Facts 5. The Company's co-founder and director is Y. 6. 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 01 July 20XX, and on or before 30 June 20XX. Product Development 7. The Company is developing an innovative Platform. Commercialisation Strategy 8. The Company has a commercialisation strategy for the innovation. High Growth Potential 9. The Company's business plan identifies a significant market opportunity for the Platform. 10. The addressable market is substantial and the Company's commercial roadmap targets scalable revenue outcomes for the Innovation. Scale up the Business 11. The Company will scale the business through a strategy tailored to treat each revenue stream as a unique market. 12. The Company's ability to scale is further supported by its phased operational and commercial roadmap. Broader than Local Market 13. The Company's business plan outlines a phased approach to growth from an Australia market to a global market, demonstrating that the Platform is intended to address a market broader than a local market. 14. The Company's global launch of the product is planned for 20XX. Competitive Advantages 15. The Company's innovation is a unique value proposition and has competitive advantages over other products currently available. Share Issues 16. The Company proposes to issue new shares to various investors during the 20XX financial year. Conclusion 17. The Company meets the eligibility criteria of an ESIC under subsection 360-40(1) for the income year ending 30 June 20XX.

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