Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-45 - RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS  

Division 360 - Early stage investors in innovation companies  

Subdivision 360-A - Tax incentives for early stage investors in innovation companies  

Operative provisions

SECTION 360-40   Early stage innovation companies  

360-40(1)    
This subsection applies to a company at a particular time (the test time ) in an income year (the current year ) if:

(a) the company was:

(i) incorporated in Australia within the last 3 income years (the latest being the current year); or

(ii) incorporated in Australia within the last 6 income years (the latest being the current year), and across the last 3 of those income years before the current year it and its *100% subsidiaries (if any) incurred total expenses of $1 million or less; or

(iii) registered in the *Australian Business Register within the last 3 income years (the latest being the current year); and

(b) the company and its 100% subsidiaries (if any) incurred total expenses of $1 million or less in the income year before the current year; and

(c) the company and its 100% subsidiaries (if any) had a total assessable income of $200,000 or less in the income year before the current year; and

(d) at the test time, none of the company ' s *equity interests are listed for quotation in the official list of any stock exchange in Australia or a foreign country; and

(e) at the test time, the company has at least 100 points under section 360-45 , or:

(i) the company is genuinely focussed on developing for commercialisation one or more new, or significantly improved, products, processes, services or marketing or organisational methods; and

(ii) the business relating to those products, processes, services or methods has a high growth potential; and

(iii) the company can demonstrate that it has the potential to be able to successfully scale that business; and

(iv) the company can demonstrate that it has the potential to be able to address a broader than local market, including global markets, through that business; and

(v) the company can demonstrate that it has the potential to be able to have competitive advantages for that business; and

(f) at the test time, the company is not a foreign company (within the meaning of the Corporations Act 2001 ).

Note:

For the purposes of paragraph (e), one way a company can demonstrate something is by engaging the services of another entity.

360-40(2)    

For the purposes of paragraph (1)(c), disregard any of the following:

(a)    an Accelerating Commercialisation Grant under the program administered by the Commonwealth known as the Entrepreneurs ' Programme;

(b)    an amount required to be included in the company ' s assessable income under subsection 355-450(1) .

360-40(3)    
Subparagraphs (1)(e)(i) to (v) cannot be satisfied for:

(a) a product, process, service or method; or

(b) an improvement to a product, process, service or method;

that is of a kind prescribed by regulations made for the purposes of this subsection.

360-40(4)    
Subsection (1) does not apply to a company if, before the test time, the company engaged in an activity of a kind prescribed by regulations made for the purposes of this subsection.