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 360-45   100 point innovation test  

360-45(1)  
At a particular time (the test time ) in an income year (the current year ), a company has the points mentioned in an item of the following table if that item applies to the company at that time.


Innovation points potentially available at that time in the current year
Column 1 Column 2
Item Points Innovation criteria
1 75 At least 50% of the company ' s total expenses for the previous income year is expenditure that the company can notionally deduct for that income year under section 355-205 (about R & D expenditure).
2 75 The company has received an Accelerating Commercialisation Grant under the program administered by the Commonwealth known as the Entrepreneurs ' Programme.
3 50 At least 15%, but less than 50%, of the company ' s total expenses for the previous income year is expenditure that the company can notionally deduct for that income year under section 355-205 (about R & D expenditure).
4 50 (a) the company has completed or is undertaking an accelerator program that:
(i) provides time-limited support for entrepreneurs with start-up businesses; and
(ii) is provided to entrepreneurs that are selected in an open, independent and competitive manner; and
(b) the entity providing that program has been providing that, or other accelerator programs for entrepreneurs, for at least 6 months; and
(c) such programs have been completed by at least one cohort of entrepreneurs.
5 50 (a) a total of at least $50,000 has been paid for *equity interests that are *shares in the company; and
(b) the company issued those shares to one or more entities that:
(i) were not *associates of the company immediately before the issue of those shares; and
(ii) did not *acquire those shares primarily to assist another entity become entitled to a *tax offset (or a modified CGT treatment) under this Subdivision; and
(c) the company issued those shares at least one day before the test time.
6 50 (a) the company has rights (including equitable rights) under a *Commonwealth law as:
(i) the patentee, or a licensee, of a standard patent; or
(ii) the owner, or a licensee, of a plant breeder ' s right;
granted in Australia within the last 5 years (ending at the test time); or
(b) the company has equivalent rights under a *foreign law.
7 25 Unless item 6 applies to the company at the test time:
(a) the company has rights (including equitable rights) under a *Commonwealth law as:
(i) the patentee, or a licensee, of an innovation patent granted and certified in Australia; or
(ii) the owner, or a licensee, of a registered design registered in Australia;
within the last 5 years (ending at the test time); or
(b) the company has equivalent rights under a *foreign law.
8 25 The company has a written agreement with:
(a) an institution or body listed in Schedule 1 to the Higher Education Funding Act 1988 (about institutions or bodies eligible for special research assistance); or
(b) an entity registered under section 29A of the Industry Research and Development Act 1986 (about research service providers);
to co-develop and commercialise a new, or significantly improved, product, process, service or marketing or organisational method.

360-45(2)  
At the test time, the company also has the points prescribed by regulations made for the purposes of this subsection if the prescribed innovation criteria for those points apply to the company at that time.


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