Private ruling: Early stage innovation company eligibility
Date of advice: 13 June 2024
Published: 29 July 2024
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 ('ITAA 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. The Company is not part of an income tax consolidated group and has two wholly owned registered subsidiaries, Company A and Company B. 2. The Company's Director and Secretary is Person A. 3. The Company's registered office and principal place of business is situated at XXX. 4. For the financial year ending DD MM YYYY, The Company did not earn any income and did not incur expenses. 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 is developing its own Intellectual Property. 7. The Company issued shares on MM YYYY and MM YYYY to assist in funding the continued development and commercialisation of their Product. 8. The Company reinvested over AUD$X into local Research and Development in the income year YYYY. The Company pays all its taxes in Australia and does not repatriate any profits overseas. Product Development. 9. The Company is an innovative organisation, with IP, design, and manufacturing at its core. This is supplemented through partnerships with Australian and leading global companies. 10. The Company has partnered with several globally leading manufactures to supplement their portfolio. These strong partnerships ensure that The Company can offer a complete portfolio to customers in Australia. Commercialisation Strategy. 11. The Company is able to launch new products to market within weeks, where competitors may take months or years. 12. The Company leads product innovation via two distinct pathways: Design of new product systems and Interactive Product Development. 13. The Company partners with leading Australian XX, academic institutions and other design consultants during both product development pathways. 14. The Company is genuinely focused on commercialisation. 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. 15. The value proposition of the Company's product addresses a local and international addressable market opportunity of approximately $X based on research conducted by The Company. 16. The Company's market during the first several years of commercial operation is likely to include those regions/countries that have regulatory frameworks that are defined as easy to navigate. Scale up the Business. 17. The Company's business model is scalable and is based upon the building on the innovation and success achieved. 18. Prior to entering global markets, development work needs to be undertaken to meet regulatory requirements and gain product acceptance in the market. Broader than local market. 19. The Company has identified that the global market is large and continues to grow. The opportunity to develop new products in this market appears to be significant. 20. Product differentiation and reputation enhancement could possibly lead to an increase in global market share through sustainable competitive advantage. Competitive Advantages. 21. The Company is an Australian Company that will be creating Australian jobs and products powered by Australian innovation. 22. The Company is the only Company in Australia, that is known to be on the path to developing this mechanism. 23. The Company is confident that being the first business to develop its products it will have significant potential value in the market. Information provided: 1. You have provided a number of documents containing detailed information in relation to Evolution Medical product, including: • Private Binding Ruling ('PBR') Application dated DD MM YYYY. • Various supporting documents. 2. We have referred to the relevant information within these documents in applying the relevant tests to your circumstances. Assumption(s): Not applicable.

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