Private ruling: Early stage innovation company
Date of advice: 14 November 2024
Published: 5 January 2026
Ruling period: Year ending 30 June 20xx
Date scheme commenced: 1 July 20xxx

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 in 20XX. 2. For the income year ended 30 June 20XX the Company incurred less than $1 million and earned less than $200,000. 3. 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 4. The Company has no wholly or partly owned subsidiaries. The Company is not part of an income tax consolidated group. 5. The Company is not a foreign company within the meaning of the Corporations Act 2001 (Cth). 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 1 July 20XX, and on or before 30 June 20XX. Product Development Stages 7. The Company is developing a unique technology and process that is not currently available in Australia. Product Development 8. The company is in the process of developing and commercialising its process and product for an addressable market. Commercialisation Strategy 9. The Commissioner considers that this condition is satisfied. High Growth Potential 10. The Commissioner considers that this condition is satisfied. Scale up the Business 11. The Commissioner considers that this condition is satisfied. Broader than Local Market 12. The Commissioner considers that this condition is satisfied. Competitive Advantages 13. The Commissioner considers that this condition is satisfied.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subdivision 360-A | Income Tax Assessment Act 1997 section 360-15 | Income Tax Assessment Act 1997 section 360-40 | Income Tax Assessment Act 1997 section 360-45 ATO view documents | Not applicable | Other references (non ATO view) | Explanatory Memorandum to the Tax Laws Amendment (Tax Incentives for Innovation) Bill 2016 | Other relevant comments | Not applicable | Key words | Early Stage Innovation Company | Tax incentives for Early Stage Investors | Early Stage Test | Principles Based Innovation Test