Class Ruling CR 2025/36

What this ruling is about: 1. This Ruling sets out the income tax consequences for certain holders of specified stock options or restricted stock units (RSUs) in the entity formerly known as Canva, Inc. (now registered as Canva Australia Holdings Pty. Ltd.) (Canva), where these stock options or RSUs were replaced with stock options or RSUs in the new Canva, Inc. (New Canva) in connection with the restructure of the Canva corporate group, which commenced on 13 February 2025 (AEDT) (Restructure). 2. Details of this scheme are set out in paragraphs 13 to 39 of this Ruling. 3. All legislative references in this Ruling are to the Income Tax Assessment Act 1997 , unless otherwise indicated. Who this Ruling applies to 4. This Ruling applies to you if: 5. This Ruling does not apply to anyone who is subject to the taxation of financial arrangements rules in Division 230 in relation to the scheme outlined in paragraphs 13 to 39 of this Ruling. Note: Division 230 will not apply to individuals unless they have made an election for it to apply. When this Ruling applies 6. This Ruling applies from 1 July 2024 to 30 June 2025. Continuation of stock options and restricted stock units 7. The New Canva stock options or RSUs you received as part of the Restructure satisfied the conditions under subsection 83A-130(1). Therefore: CGT event C2 happens 8. CGT event C2 happened to each of your Canva stock options or RSUs when it was cancelled as part of the Restructure. 9. The time of the CGT event is the date when your Canva stock options or RSUs were cancelled (paragraph 104-25(2)(b)). 10. Subject to the application of section 130-80 and section 768-915: 11. The capital proceeds are equal to the market value of the New Canva stock option or RSU you received in respect of the cancellation of your Canva stock option or RSU, worked out at the time your Canva stock option or RSU ended (paragraph 116-20(1)(b)). Disregard capital gains on stock options or restricted stock units to which Subdivision 83A-C applies and that have not been subject to an ESS deferred taxing point 12. Any capital gain or capital loss you made from CGT event C2 happening to your Canva stock option or RSU to which Subdivision 83A-C applies, and that have not been subject to an ESS deferred taxing point, is disregarded (subsection 130-80(1) and, if you were a temporary resident, also under subsection 768-915(1)). 13. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. Background 14. Canva was incorporated in the State of Delaware in the United States of America (US) on 28 June 2012 under the Delaware General Corporation Law (DGCL). 15. Canva is a resident of Australia (as defined in subsection 6(1) of the Income Tax Assessment Act 1936 ) and a resident of the US for tax purposes. 16. Canva is the head company of the Canva income tax consolidated group comprising Canva, Canva Pty Ltd (CPL) and its wholly owned Australian subsidiaries. Canva also owns shares in various non-Australian subsidiaries directly and indirectly through CPL. 17. Canva had the following classes of shares on issue: Stock plans 18. Canva maintained several stock plans for employees, directors and consultants of Canva and its subsidiaries. This included the following stock plans (together, the Plans and each a Plan) under which it issued options and RSUs to its employees and contractors (participants): 19. The stock options were governed by the rules of the relevant Plan and were subject to the agreements associated with the relevant Plan. 20. The key features of stock options issued under each Plan were broadly as follows: 21. Subdivision 83A-C applied to the stock options and RSUs issued to participants under the Plans. Restructure 22. As part of the restructuring of the Canva global corporate group, commencing on 13 February 2025 (AEDT), New Canva was incorporated as the ultimate holding company of the Canva group. 23. Participation in the Restructure was available on the same terms to all interest holders of a particular type in Canva. 24. Post-Restructure, CPL intends to continue its business operations in substantially the same manner. Detailed steps of the Restructure 25. In carrying out the Restructure, the steps detailed at paragraphs 26 to 39 of this Ruling were undertaken. Step 1: Incorporation of new company 26. New Canva was incorporated in Delaware as a wholly owned subsidiary. Canva owned all the shares in New Canva. Step 2: Incorporation of Merger Sub 27. A wholly owned subsidiary of New Canva was incorporated in Delaware in the US (Merger Sub). New Canva owned all the shares in Merger Sub. Step 3: The Merger 28. Pursuant to section 251(g) of the DGCL, the following steps occurred (collectively, the Merger): 29. The Merger happened in accordance with section 251(g) of the DGCL and subject to and upon the terms and conditions of a merger agreement (Merger Agreement) entered into between Canva, New Canva and Merger Sub (collectively, the Parties). 30. The Merger became effective on 13 February 2025 (AEDT) (12 February 2025 US Eastern Standard Time (EST)) (Effective Time). 31. At the Effective Time, by virtue of the Merger and without any further action by the Parties or Canva shareholders: 32. The Merger was completed at the Effective Time (Merger Closing Date), and Canva became a wholly owned subsidiary of New Canva. 33. At the Effective Time, pursuant to the Merger Agreement, Canva transferred to New Canva, and New Canva assumed all rights and agreed to perform all obligations of Canva with respect to, Canva's stock options and RSUs. The assumption of equity plans, equity awards and agreements was effected pursuant to the Merger Agreement and board actions by Canva and New Canva boards. 34. Under section 10 of the Merger Agreement, existing holders of stock options and RSUs in Canva were issued corresponding New Canva stock options and RSUs, which mirrored the terms and economic conditions of the existing Canva stock plans. Step 4: Conversion to a Delaware limited liability company 35. On the day after the Merger Closing Date (US EST), Canva converted to a Delaware limited liability company (Canva LLC), carried out in accordance with section 18-214 of the Delaware Limited Liability Company Act (DLLCA) and section 266 of the DGCL (conversion). The conversion became effective on 13 February 2025 (AEDT and US EST), being the date on which Canva filed the certificate of conversion (executed in accordance with the DGCL) with the Delaware Secretary of State. 36. Under Delaware law: 37. In connection with the conversion: Step 5: Transfer of registration in Australia 38. On 12 March 2025 (AEDT and US EST), Canva LLC registered as Canva Australia Holdings Pty. Ltd. (Canva Australia Holdings), a proprietary company limited by shares under Part 5B.1 of the Corporations Act 2001 , transferring its registration from the US to Australia. Step 6: US 'check-the-box' election 39. A US 'check the box' election was made in respect of Canva Australia Holdings by filing US Internal Revenue Service Form 8832. The election classified Canva Australia Holdings as a 'disregarded entity' for US federal income tax purposes, effective from the time Canva LLC's registration was transferred to Australia. Commissioner of Taxation 28 May 2025 Stock options and restricted stock units 40. The object of section 83A-130 is to allow an ESS interest to continue being taxed under Division 83A, where either: 41. The Restructure satisfies the requirements of section 83A-130 in relation to Canva stock options and RSUs because: 42. Accordingly, for the purposes of Division 83A, the New Canva stock options or RSUs you acquired in connection with the Restructure are treated as a continuation of your Canva stock options or RSUs you previously held (subsection 83A-130(2)). 43. There will not be an ESS deferred taxing point for the purposes of Subdivision 83A-C upon the exchange of your Canva stock options or RSUs for New Canva stock options or RSUs as part of the Restructure. Capital gains disregarded 44. Any capital gain or capital loss from CGT event C2 happening to your Canva stock options or RSUs to which Subdivision 83A-C applies, and that have not been subject to an ESS deferred taxing point, will be disregarded under subsection 130-80(1) for the following reasons: 45. If you were a temporary resident within the meaning of subsection 995-1(1) immediately before and at the time of the Restructure, any capital gain or capital loss you made from CGT event C2 happening to your Canva stock option or RSU is, disregarded also under subsection 768-915(1)). © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).

Class of entities or scheme: 13. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. | Background: 14. Canva was incorporated in the State of Delaware in the United States of America (US) on 28 June 2012 under the Delaware General Corporation Law (DGCL). 15. Canva is a resident of Australia (as defined in subsection 6(1) of the Income Tax Assessment Act 1936 ) and a resident of the US for tax purposes. 16. Canva is the head company of the Canva income tax consolidated group comprising Canva, Canva Pty Ltd (CPL) and its wholly owned Australian subsidiaries. Canva also owns shares in various non-Australian subsidiaries directly and indirectly through CPL. 17. Canva had the following classes of shares on issue: | Stock plans: 18. Canva maintained several stock plans for employees, directors and consultants of Canva and its subsidiaries. This included the following stock plans (together, the Plans and each a Plan) under which it issued options and RSUs to its employees and contractors (participants): 19. The stock options were governed by the rules of the relevant Plan and were subject to the agreements associated with the relevant Plan. 20. The key features of stock options issued under each Plan were broadly as follows: 21. Subdivision 83A-C applied to the stock options and RSUs issued to participants under the Plans. | Restructure: 22. As part of the restructuring of the Canva global corporate group, commencing on 13 February 2025 (AEDT), New Canva was incorporated as the ultimate holding company of the Canva group. 23. Participation in the Restructure was available on the same terms to all interest holders of a particular type in Canva. 24. Post-Restructure, CPL intends to continue its business operations in substantially the same manner. | Detailed steps of the Restructure: 25. In carrying out the Restructure, the steps detailed at paragraphs 26 to 39 of this Ruling were undertaken. | Step 1: Incorporation of new company: 26. New Canva was incorporated in Delaware as a wholly owned subsidiary. Canva owned all the shares in New Canva. | Step 2: Incorporation of Merger Sub: 27. A wholly owned subsidiary of New Canva was incorporated in Delaware in the US (Merger Sub). New Canva owned all the shares in Merger Sub. | Step 3: The Merger: 28. Pursuant to section 251(g) of the DGCL, the following steps occurred (collectively, the Merger): 29. The Merger happened in accordance with section 251(g) of the DGCL and subject to and upon the terms and conditions of a merger agreement (Merger Agreement) entered into between Canva, New Canva and Merger Sub (collectively, the Parties). 30. The Merger became effective on 13 February 2025 (AEDT) (12 February 2025 US Eastern Standard Time (EST)) (Effective Time). 31. At the Effective Time, by virtue of the Merger and without any further action by the Parties or Canva shareholders: 32. The Merger was completed at the Effective Time (Merger Closing Date), and Canva became a wholly owned subsidiary of New Canva. 33. At the Effective Time, pursuant to the Merger Agreement, Canva transferred to New Canva, and New Canva assumed all rights and agreed to perform all obligations of Canva with respect to, Canva's stock options and RSUs. The assumption of equity plans, equity awards and agreements was effected pursuant to the Merger Agreement and board actions by Canva and New Canva boards. 34. Under section 10 of the Merger Agreement, existing holders of stock options and RSUs in Canva were issued corresponding New Canva stock options and RSUs, which mirrored the terms and economic conditions of the existing Canva stock plans. | Step 4: Conversion to a Delaware limited liability company: 35. On the day after the Merger Closing Date (US EST), Canva converted to a Delaware limited liability company (Canva LLC), carried out in accordance with section 18-214 of the Delaware Limited Liability Company Act (DLLCA) and section 266 of the DGCL (conversion). The conversion became effective on 13 February 2025 (AEDT and US EST), being the date on which Canva filed the certificate of conversion (executed in accordance with the DGCL) with the Delaware Secretary of State. 36. Under Delaware law: 37. In connection with the conversion: | Step 5: Transfer of registration in Australia: 38. On 12 March 2025 (AEDT and US EST), Canva LLC registered as Canva Australia Holdings Pty. Ltd. (Canva Australia Holdings), a proprietary company limited by shares under Part 5B.1 of the Corporations Act 2001 , transferring its registration from the US to Australia. | Step 6: US 'check-the-box' election: 39. A US 'check the box' election was made in respect of Canva Australia Holdings by filing US Internal Revenue Service Form 8832. The election classified Canva Australia Holdings as a 'disregarded entity' for US federal income tax purposes, effective from the time Canva LLC's registration was transferred to Australia. Commissioner of Taxation 28 May 2025

Ruling: 1. This Ruling sets out the income tax consequences for certain holders of specified stock options or restricted stock units (RSUs) in the entity formerly known as Canva, Inc. (now registered as Canva Australia Holdings Pty. Ltd.) (Canva), where these stock options or RSUs were replaced with stock options or RSUs in the new Canva, Inc. (New Canva) in connection with the restructure of the Canva corporate group, which commenced on 13 February 2025 (AEDT) (Restructure). 2. Details of this scheme are set out in paragraphs 13 to 39 of this Ruling. 3. All legislative references in this Ruling are to the Income Tax Assessment Act 1997 , unless otherwise indicated. | Who this Ruling applies to: 4. This Ruling applies to you if: 5. This Ruling does not apply to anyone who is subject to the taxation of financial arrangements rules in Division 230 in relation to the scheme outlined in paragraphs 13 to 39 of this Ruling. Note: Division 230 will not apply to individuals unless they have made an election for it to apply. | When this Ruling applies: 6. This Ruling applies from 1 July 2024 to 30 June 2025. | Continuation of stock options and restricted stock units: 7. The New Canva stock options or RSUs you received as part of the Restructure satisfied the conditions under subsection 83A-130(1). Therefore: | CGT event C2 happens: 8. CGT event C2 happened to each of your Canva stock options or RSUs when it was cancelled as part of the Restructure. 9. The time of the CGT event is the date when your Canva stock options or RSUs were cancelled (paragraph 104-25(2)(b)). 10. Subject to the application of section 130-80 and section 768-915: 11. The capital proceeds are equal to the market value of the New Canva stock option or RSU you received in respect of the cancellation of your Canva stock option or RSU, worked out at the time your Canva stock option or RSU ended (paragraph 116-20(1)(b)). | Disregard capital gains on stock options or restricted stock units to which Subdivision 83A-C applies and that have not been subject to an ESS deferred taxing point: 12. Any capital gain or capital loss you made from CGT event C2 happening to your Canva stock option or RSU to which Subdivision 83A-C applies, and that have not been subject to an ESS deferred taxing point, is disregarded (subsection 130-80(1) and, if you were a temporary resident, also under subsection 768-915(1)). 13. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. | Background: 14. Canva was incorporated in the State of Delaware in the United States of America (US) on 28 June 2012 under the Delaware General Corporation Law (DGCL). 15. Canva is a resident of Australia (as defined in subsection 6(1) of the Income Tax Assessment Act 1936 ) and a resident of the US for tax purposes. 16. Canva is the head company of the Canva income tax consolidated group comprising Canva, Canva Pty Ltd (CPL) and its wholly owned Australian subsidiaries. Canva also owns shares in various non-Australian subsidiaries directly and indirectly through CPL. 17. Canva had the following classes of shares on issue: | Stock plans: 18. Canva maintained several stock plans for employees, directors and consultants of Canva and its subsidiaries. This included the following stock plans (together, the Plans and each a Plan) under which it issued options and RSUs to its employees and contractors (participants): 19. The stock options were governed by the rules of the relevant Plan and were subject to the agreements associated with the relevant Plan. 20. The key features of stock options issued under each Plan were broadly as follows: 21. Subdivision 83A-C applied to the stock options and RSUs issued to participants under the Plans. | Restructure: 22. As part of the restructuring of the Canva global corporate group, commencing on 13 February 2025 (AEDT), New Canva was incorporated as the ultimate holding company of the Canva group. 23. Participation in the Restructure was available on the same terms to all interest holders of a particular type in Canva. 24. Post-Restructure, CPL intends to continue its business operations in substantially the same manner. | Detailed steps of the Restructure: 25. In carrying out the Restructure, the steps detailed at paragraphs 26 to 39 of this Ruling were undertaken. | Step 1: Incorporation of new company: 26. New Canva was incorporated in Delaware as a wholly owned subsidiary. Canva owned all the shares in New Canva. | Step 2: Incorporation of Merger Sub: 27. A wholly owned subsidiary of New Canva was incorporated in Delaware in the US (Merger Sub). New Canva owned all the shares in Merger Sub. | Step 3: The Merger: 28. Pursuant to section 251(g) of the DGCL, the following steps occurred (collectively, the Merger): 29. The Merger happened in accordance with section 251(g) of the DGCL and subject to and upon the terms and conditions of a merger agreement (Merger Agreement) entered into between Canva, New Canva and Merger Sub (collectively, the Parties). 30. The Merger became effective on 13 February 2025 (AEDT) (12 February 2025 US Eastern Standard Time (EST)) (Effective Time). 31. At the Effective Time, by virtue of the Merger and without any further action by the Parties or Canva shareholders: 32. The Merger was completed at the Effective Time (Merger Closing Date), and Canva became a wholly owned subsidiary of New Canva. 33. At the Effective Time, pursuant to the Merger Agreement, Canva transferred to New Canva, and New Canva assumed all rights and agreed to perform all obligations of Canva with respect to, Canva's stock options and RSUs. The assumption of equity plans, equity awards and agreements was effected pursuant to the Merger Agreement and board actions by Canva and New Canva boards. 34. Under section 10 of the Merger Agreement, existing holders of stock options and RSUs in Canva were issued corresponding New Canva stock options and RSUs, which mirrored the terms and economic conditions of the existing Canva stock plans. | Step 4: Conversion to a Delaware limited liability company: 35. On the day after the Merger Closing Date (US EST), Canva converted to a Delaware limited liability company (Canva LLC), carried out in accordance with section 18-214 of the Delaware Limited Liability Company Act (DLLCA) and section 266 of the DGCL (conversion). The conversion became effective on 13 February 2025 (AEDT and US EST), being the date on which Canva filed the certificate of conversion (executed in accordance with the DGCL) with the Delaware Secretary of State. 36. Under Delaware law: 37. In connection with the conversion: | Step 5: Transfer of registration in Australia: 38. On 12 March 2025 (AEDT and US EST), Canva LLC registered as Canva Australia Holdings Pty. Ltd. (Canva Australia Holdings), a proprietary company limited by shares under Part 5B.1 of the Corporations Act 2001 , transferring its registration from the US to Australia. | Step 6: US 'check-the-box' election: 39. A US 'check the box' election was made in respect of Canva Australia Holdings by filing US Internal Revenue Service Form 8832. The election classified Canva Australia Holdings as a 'disregarded entity' for US federal income tax purposes, effective from the time Canva LLC's registration was transferred to Australia. Commissioner of Taxation 28 May 2025 | Stock options and restricted stock units: 40. The object of section 83A-130 is to allow an ESS interest to continue being taxed under Division 83A, where either: 41. The Restructure satisfies the requirements of section 83A-130 in relation to Canva stock options and RSUs because: 42. Accordingly, for the purposes of Division 83A, the New Canva stock options or RSUs you acquired in connection with the Restructure are treated as a continuation of your Canva stock options or RSUs you previously held (subsection 83A-130(2)). 43. There will not be an ESS deferred taxing point for the purposes of Subdivision 83A-C upon the exchange of your Canva stock options or RSUs for New Canva stock options or RSUs as part of the Restructure. | Capital gains disregarded: 44. Any capital gain or capital loss from CGT event C2 happening to your Canva stock options or RSUs to which Subdivision 83A-C applies, and that have not been subject to an ESS deferred taxing point, will be disregarded under subsection 130-80(1) for the following reasons: 45. If you were a temporary resident within the meaning of subsection 995-1(1) immediately before and at the time of the Restructure, any capital gain or capital loss you made from CGT event C2 happening to your Canva stock option or RSU is, disregarded also under subsection 768-915(1)). © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).


Appendix: Stock options and restricted stock units: 40. The object of section 83A-130 is to allow an ESS interest to continue being taxed under Division 83A, where either: 41. The Restructure satisfies the requirements of section 83A-130 in relation to Canva stock options and RSUs because: 42. Accordingly, for the purposes of Division 83A, the New Canva stock options or RSUs you acquired in connection with the Restructure are treated as a continuation of your Canva stock options or RSUs you previously held (subsection 83A-130(2)). 43. There will not be an ESS deferred taxing point for the purposes of Subdivision 83A-C upon the exchange of your Canva stock options or RSUs for New Canva stock options or RSUs as part of the Restructure. | Capital gains disregarded: 44. Any capital gain or capital loss from CGT event C2 happening to your Canva stock options or RSUs to which Subdivision 83A-C applies, and that have not been subject to an ESS deferred taxing point, will be disregarded under subsection 130-80(1) for the following reasons: 45. If you were a temporary resident within the meaning of subsection 995-1(1) immediately before and at the time of the Restructure, any capital gain or capital loss you made from CGT event C2 happening to your Canva stock option or RSU is, disregarded also under subsection 768-915(1)). © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).


What this Ruling is about | If this Ruling applies to you, and you correctly rely on it, we will apply the law to you in the way set out in this Ruling. That is, you will not pay any more tax or penalties or interest in respect of the matters covered by this Ruling.


Legislative references: ITAA 1936 6(1) ITAA 1997 Div 83A ITAA 1997 Subdiv 83A-C ITAA 1997 83A-130 ITAA 1997 83A-130(1) ITAA 1997 83A-130(1)(a)(i) ITAA 1997 83A-130(1)(b) ITAA 1997 83A-130(2) ITAA 1997 83A-130(2)(a) ITAA 1997 83A-130(2)(b) ITAA 1997 83A-130(4) ITAA 1997 83A-130(9)(a) ITAA 1997 83A-130(9)(b) ITAA 1997 104-25(2)(b) ITAA 1997 104-25(3) ITAA 1997 116-20(1)(b) ITAA 1997 130-80 ITAA 1997 130-80(1) ITAA 1997 130-80(1)(a) ITAA 1997 130-80(1)(b) ITAA 1997 130-80(1)(d)(ii) ITAA 1997 130-80(2) ITAA 1997 Div 230 ITAA 1997 768-915 ITAA 1997 768-915(1) ITAA 1997 855-15 ITAA 1997 995-1(1) Corporations Act 2001 Pt 5B.1 Delaware General Corporation Law 251(g) Delaware General Corporation Law 266 Delaware General Corporation Law 266(g) Delaware Limited Liability Company Act 18-214 Delaware Limited Liability Company Act 18-214(i)