Private ruling: Early stage innovation company
Date of advice: 3 July 2025
Published: 1 September 2025
Ruling period: Year ending 30 June 20YY
Date scheme commenced: 1 July 20YY

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 20YY to 30 June 20YY? | A1: Yes

Relevant facts and circumstances: Early Stage Test The company is an Australian proprietary company incorporated in 20YY. For the income year ended 30 June 20YY the company incurred less than $1 million and earned less than $200,000. 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 The company has no wholly or partly owned subsidiaries. The company is not part of an income tax consolidated group. The company is not a foreign company within the meaning of the Corporations Act 2001 (Cth). 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 20YY, and on or before 30 June 20YY. Product Development Stages The company is developing a unique platform that is not currently available in Australia. Product Development The company is in the process of developing and commercialising its platform for an addressable market. Commercialisation Strategy There is an established strategy for the commercialisation of the platform. High Growth Potential The platform has a high growth potential given its application to its current target market as well as related markets, both domestic and international. Scale up the Business The platform can be scaled efficiently as new clients in the market and other markets may be added at minimal costs. Broader than Local Market The platform can address more than the local market given its potential to expand overseas. Competitive Advantages The uniqueness of the product gives it a competitive advantage over other products operating in the same market.

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 Other references (non ATO view) | Explanatory Memorandum to the Tax Laws Amendment (Tax Incentives for Innovation) Bill 2016