Edited version of private advice

Authorisation Number: 1051832113862

Date of advice: 28 April 2021

Ruling

Subject: Early stage innovation company

Question

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)?

Answer

Yes

This ruling applies for the following period:

Year ending 31 December ZZZZ

The scheme commences on:

DD Month ZZZZ

Relevant facts and circumstances

The Company is a public company limited by shares which was incorporated in Australia and registered in the Australian Business Register (ABR) during the year ending 31 December ZZZZ. Its equity interests are not listed for quotation in the official list of any stock exchange in Australia or a foreign company.

The Company's global headquarters are located in Australia.

The Company has one wholly owned subsidiary incorporated in Australia, Subsidiary A1 Ltd (registered on the ABR during the year ending 31 December ZZZZ), and two wholly owned subsidiaries, Subsidiary N-R1 and Subsidiary N-R2 which were incorporated overseas.

The Company's non-resident subsidiaries were incorporated during the period with an end date of 31 December ZZZZ.

The Commissioner of Taxation has approved a substituted accounting period (SAP) for the Company - a change from 30 June to a 31 December year end. The current income year for the Company is a period with a start date during the year ended 31 December ZZZZ and end date of 31 December ZZZZ.

The Company and its wholly owned subsidiaries had not been incorporated in the previous income year and therefore did not incur any expenses or derive any assessable income during that period.

The innovation

The Company is a digital asset infrastructure company and its aim is to develop technology. If the Company successfully develops its technology:

•         it will be able to provide access to low-cost data centres; and

•         the software technology can be deployed to help solve power issues on a power network.

The Company's objective is to solve both domestic and global problems of energy generation and end-user mismatch, by leveraging emerging technology such as EDGE computing, distributed processing networks and off-peak processing to solve traditional and non-traditional computing problems in the fields of social media, Internet of Things (IoT), Artificial Intelligence (AI) and blockchain.

The Company believes that if it successfully develops its technology and pairs this technology with appropriate stranded or distressed energy assets, it will be able to provide a unique and low-cost data centre offering.

The Company also considers that successful development of the technology could be used as a medium to connect power generators and infrastructure owners to address power load issues by using its custom designed MDCs equipped with the latest generation of Application Specific Integrated Circuit, Graphic Processing Units and Field Programmable Gate Array hardware. This will effectively operate as the intermediate technology to utilise the peak and off-peak supply and demand issues combined with the energy production by stranded energy assets to flexibly increase or decrease the power loads supplied to distributed networks.

The Company believes that if it successfully develops its technology, the technology could provide flexibility, or 24/7 energy demand, at a large scale by increasing the processing capacity of distributed networks and reducing the high operating energy costs.

Management team

The Company believes that it has established Australian and overseas management teams with the expertise to grow the business. Intellectual property

The Company has owned all intellectual property associated with its technology since incorporation.

None of this intellectual property is protected by either patent or trademark. Rather, the intellectual property owned by the Company includes the design of modular data centres and liquid immersion tanks, business names and domain names.

The Company enforces its legal rights to these technologies through legal agreements - for example agreements between the Company and other entities for the development of the systems, and the services agreements between the Company and entities providing design and manufacturing services.

The intellectual property was transferred from a capital to the Company during the period from its incorporation to the year ended 31 December ZZZZ. The transfer was given effect by a business and asset sale deed and was transacted on commercial terms (at arm's length). The business and asset transfer was funded by the issue of the Company's shares to the unitholders of the capital fund. In particular, the Company issued shares to investors on various dates between its incorporation date during the year end to the end of the year ended 31 December ZZZZ.

Competitive advantages

The Company believes that its technology solution has four main competitive advantages / key differentiators over its competition (being the existing data centres in the market):

•         lower upfront capital outlay expenses (CAPEX) costs

•         access to cheap energy costs (via stranded energy assets)

•         significantly superior processing capacity

•         superior power processing capacity.

The Company has undertaken significant research on the state of the market and available technology.

The Company believe that if their technology solution is successfully developed, it will be the first in the market to address the problems that the existing data centres has failed to resolve.

The Company believes that it will be able to maintain its first mover advantage by not publicly marketing its technology. The Company plans to sustain its competitive advantage by locating its MDC technology at its facilities (and requiring third parties that want to use the technology to use it through its controlled facilities, rather than transporting the technology to one of its own facilities).

Based on the Company's research, substitute technologies are not available for its technology, the Gridtech software and the scale of its liquid immersion cooling design.

Addressable market

The Company has identified two addressable markets:

•         companies requiring access to data centres.

•         energy providers.

Broader than local market

Further to the above, the Company is developing its technology to withstand extreme weather conditions associated with stranded energy assets. This means the geographical application of the technology will not be limited by weather events or patterns. To date, the Company has tested its technology at various distressed energy assets overseas and it has identified further distressed energy assets in Australia, as being appropriate sites for the use of the technology.

Assuming the Company's technology is successfully developed, it has the potential to address a broad market which is not confined to Australia, specifically:

•         where customers use the Company's solution for data storage, those customers may be located anywhere in the world (ie the customers of the technology do not need to be in the same country as the technology which is paired with the distressed energy asset)

•         where the Company's energy solution is being deployed, the customers of that technology (ie energy providers) will be located in the same country as the technology. However, the Company's intention is that the technology will be able to be deployed globally.

The main objective of the Company's technology solution is to overcome the problems in the existing digital infrastructure sector, specifically, the limited processing capacity and significant energy costs. This provides the Company with the opportunity to market its technology globally to companies in the fields of social media, IoT, AI and blockchain, as these companies are continuously seeking for increased processing capacity at a lower cost for its distributed networks.

Given the use of technology is associated with stranded energy assets aimed at solving a problem faced by the digital infrastructure sector at a global scale, the Company believes it can demonstrate that it has the potential to be able to address the global market through its technology solution.

New or significantly improved innovation for applicable addressable market

The Company states that its activities go beyond the modification or customisation of existing products. It believes that if it is successful in its activities, it will create the following new and scaleable technology which, in its view, satisfies the 'significantly improved threshold:

•         The Company will know how to utilise distressed or stranded energy assets to power an MDC service efficiently and reliably in remote areas and extreme climates. To date, there has been no scalable or commercialised use of a distressed or stranded energy asset to power an MDC, or the successful and reliable operation of an MDC in the multiple extreme weather conditions in which those stranded or distressed energy assets are typically located.

•         The Company will have designed a unique MDC which utilises liquid immersion technology to cool an MDC. Air is typically used to cool MDCs, although there are some small and non-scaleable immersion data solutions (in MDCs of up to 1.5MW capacity). No MDC of any scale or capacity beyond that has been successfully designed using liquid immersion technology to cool the MDC and its components; the Company will be the first entity to develop this technology if successful.

•         If the Company successfully designs an MDC to pair with stranded technology assets, it will be able to assist with managing load curtailment issues and match power supplied by stranded energy assets to network demand. To date, MDCs have not successfully been powered by stranded or distressed energy assets in any material scale (greater than 10MW).

Commercialisation strategy

The Company states that is focused on developing its technology for a revenue generating purpose.

The Company states that it has had some success in testing its custom MDC design using stranded energy overseas. It plans to test this MDC technology in Australia and other parts of the world in slightly different climactic conditions, to confirm that the MDC will perform at its optimal output in those conditions.

Assuming it can successfully test this technology in both Australia and the rest of the world, the Company's plan is that the technology will be available for use globally to companies in the field of social media, IoT, AI and blockchain, as well as energy providers which are seeking to continuously improve user experience by increasing the processing capacity with efficient use of energy at lower costs.

The Company states that it is attracting external investment on the basis of commercialising its solution and generating a return on that solution.

The stage of the innovation

In pursuit of developing its technology, the Company states that it undertook the following work during the relevant current income year:

•         It identified several stranded and distressed energy assets. It undertook research and testing to determine at which of these stranded and distressed energy asset sites it can co-locate its solution.

•         It designed, built and tested an initial MDC which it believes is able to be deployed in remote locations with extreme climates and weather conditions. Further iterations of the MDC were subsequently being designed and tested (eg modifications relating to components of the MDC to assist MDC performance in extreme weather conditions).

•         It investigated and has tested liquid immersion technology to cool its MDCs, rather than using traditional air cooling. This liquid immersion cooling solution could offer power usage effectiveness beyond any currently available solutions/offerings. The Company is currently designing an MDC which incorporates this technology.

Growth potential

The Company is developing a technology solution which it seeks to pair with stranded energy assets (for example, gas and coal assets located in remote locations) as a power source to operate the MDC.

The MDC technology solution the Company is seeking to develop is intended to withstand extreme weather conditions which means there is no geographical limit on the use of the technology. In addition, the software solution that the Company is seeking to develop as part of the MDC technology will not be limited to application in any market and will be designed to solve both Australian and global problems of energy generation and end-user mismatch.

In the Company's view, its technology solution has high growth potential for the following reasons:

•         The MDC will provide access to low-cost data centres with significant processing capacity.

•         The MDC is a semi-mobile solution which enables faster deployment and reduces the risk of the site becoming uneconomic if local economic or legal conditions make the operation of the data centre marginal. Therefore, the use of the MDC technology for data hosting / centre purposes will not be geographically restricted.

•         If successfully developed, the technology will give energy distributors / providers.

As companies in the fields of social media, IoT, AI and blockchain as well as energy provider companies are continuously seeking to improve user experience and overcome the limited processing capacity of distributed networks, the Company believe there is a high growth potential for their MDC technology solution to solve a global problem which existing digital infrastructure has not resolved. By pairing the MDC technology solution with stranded energy assets at remote locations in Australia, and other parts of the world, the Company has a high growth and scale potential to sell to companies and end-users globally.

Scalability

A significant quantum of the Company's costs are, and will be, in connection with developing and testing its MDC technology and the associated software solution. Once it has fully developed its MDC technology and associated software solution, the Company will be able to construct additional MDCs with the software solution. The MDCs and software solution will not be bespoke or customised to specific stranded energy assets and the solution can be produced on a scalable basis.

Once the Company has fully developed its MDC solutions, it anticipates that increases in revenue can be achieved through minimal incremental increases in operating costs. The only additional costs it will incur will be the:

•         the construction of the physical MDCs, which will require purchasing the component parts and some labour costs. It expects there will be cost synergies when it constructs higher quantities of MDCs

•         deploying the software solution in the MDCs, which will involve some labour costs; and

•         the underlying computing processing equipment required to undertake the relevant computing tasks.

Information provided

You have provided information in a number of documents in relation to the Company's technology solution.

We have referred to the relevant information within these documents in applying the relevant tests to your circumstances.

Relevant legislative provisions

Income Tax Assessment Act 1997 Subdivision 360-A

Income Tax Assessment Act 1997 section 360-40

Income Tax Assessment Act 1997 section 360-45

Reasons for decision

All legislative references are to the ITAA 1997 unless otherwise indicated.

Question 1:

Summary

The Company meets the eligibility requirements of, an ESIC under, subsection 360-40(1) for the year ending 31 December ZZZZ.

Detailed reasoning

Qualifying Early Stage Innovation Company

Subsection 360-40(1) outlines the criteria required for a company to qualify as an Early Stage Innovation Company (ESIC) at a particular time in an income year. This time is referred to as the test time. The criteria are based on a series of tests to identify if the company is at an early stage of its development and it is developing new or significantly improved innovations to generate an economic return.

'The early stage test'

The early stage test requirements are outlined in detail within paragraphs 360-40(1)(a) to (d).

Incorporation or Registration - paragraph 360-40(1)(a)

To meet the requirement in paragraph 360-40(1)(a), at a particular time (the test time) in an income year (the current year) the company must have been either:

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

                ii.       incorporated in Australia within the last six income years (the latest being the current year), and across the last three of those income years before the current year the company and its 100% subsidiaries incurred total expenses of $1 million or less; or

               iii.       registered in the Australian Business Register (ABR) within the last three income years (the latest being the current year).

The term 'current year' is defined in subsection 360-40(1) with reference to the 'test time'; the 'current year' being the income year in which the company issues shares to the investor.

A company that does not meet any of these conditions will not qualify as an ESIC.

Total expenses - paragraph 360-40(1)(b)

To meet the requirement in paragraph 360-40(1)(b), the company and its 100% subsidiaries must have incurred total expenses of $1 million or less in the income year before the current year.

Assessable income - paragraph 360-40(1)(c)

To meet the requirement in paragraph 360-40(1)(c), the company and its 100% subsidiaries must have derived total assessable income of $200,000 or less in the income year before the current year.

No stock exchange listing - paragraph 360-40(1)(d)

To meet the requirement in paragraph 360-40(1)(d), the company must not be listed on any stock exchange in Australia or a foreign country.

Innovation tests

If the company satisfies the early stage test, the company must also satisfy one of two innovation tests: the objective (100 point) test or the principles-based test.

'Principles-based test' - subparagraphs 360-40(1)(e)(i) to (v)

To satisfy the principles-based test, the company must meet five requirements in paragraph 360-40(1)(e). This is tested at a time immediately after the relevant new shares are issued to the investor.

The company can demonstrate that it meets each requirement through existing documentation such as a business plan, commercialisation strategy, competition analysis or other company documents. The company must be able to show that tangible steps have been or will be taken in relation to each of the requirements.

The five requirements of the principles-based test, as outlined in paragraph 360-40(1)(e) are:

                 i.       the company must be genuinely focused on developing one or more new or significantly improved innovations for commercialisation

                ii.       the business relating to that innovation must have a high growth potential

               iii.       the company must demonstrate that it has the potential to be able to successfully scale up the business relating to the innovation

              iv.       the company must 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 must demonstrate that it has the potential to be able to have competitive advantages for that business.

Developing new or significantly improved innovations for commercialisation

For the purposes of Subdivision 360-A, the Explanatory Memorandum to the Tax Laws Amendment (Tax Incentives for Innovation) Bill 2016 ('EM') provides the following at paragraph 1.76 in relation to the definition of innovation:

"Implicit in the definition of innovation is the requirement that the company is developing a new or significantly improved type of innovation such as a product, process, service, marketing or organisational method. This list of various types of innovations provides flexibility for innovation companies and is adaptable to current and future innovations. The Oslo Manual, published by the Organisation for Economic Co-operation and Development (OECD) provides a description of these different types of innovations..."[1]

The innovation being developed by the company must either be new or significantly improved for an applicable addressable market. The company's addressable market is the revenue opportunity or market demand arising from the innovation or the related business. The addressable market must be objective and realistic.

Improvements must be significant in nature to meet this requirement. Customising existing products or minor changes resulting from software updates, pricing strategies or seasonal changes are examples of improvements that would not be considered significant.

The OECD Oslo Manual defines innovations as significant changes, with the intention of distinguishing significant changes from routine minor changes. However, it is important to recognise that an innovation can also consist of a series of smaller incremental changes that together constitute a significant change.[2]

In discussing services innovation activity, paragraph 111 of the OECD Oslo Manual states,

"Innovation activity in services also tends to be a continuous process, consisting of a series of incremental changes in products and processes. This may occasionally complicate the identification of innovations in services in terms of single events, i.e. as the implementation of a significant change in products, processes or other methods."

The OECD Oslo Manual, in relation to defining innovative services, states at paragraph 161 that "innovations in services can include significant improvements in how they are provided (for example, in terms of their efficiency or speed), the addition of new functions or characteristics to existing services, or the introduction of entirely new services."

The company must be genuinely focused on developing the innovation for a commercial purpose in order to generate economic value and revenue for the company. This requirement draws the distinction between simply having an idea and commercialising an idea.

'Commercialisation' includes a range of activities that involve the implementation or sale of a new or significantly improved innovation that will directly lead to the generation of economic value for the company.

High growth potential

The company must be able to demonstrate that it has the potential for high growth within a broad addressable market. This refers to the company's ability to rapidly expand its business. Companies that are limited to supplying local customers will not meet this requirement.

Scalability

The company must be able to demonstrate that it has the potential to successfully scale up the business. The company must have operating leverage, where as it increases its market share or enters into new markets, its existing revenues can be multiplied with a reduced or minimal increase in operating costs per unit.

Broader than local market

The company must be able to demonstrate that it has the potential to address a market that is broader than a local city, area or region. The company does not need to have a serviceable market at a national, multinational or global scale at the test time. However, it does need to show that the business is capable of addressing a market that is broader than a local market and that the business can be adapted to a broader scale in the future.

Competitive advantages

The company must be able to demonstrate that it has the potential to have competitive advantages, such as a cost or differential advantage over its competitors which are sustainable for the business as it expands. The company can analyse what competitors in the market offer, and consider whether the company has a differentiating advantage that would allow it to outperform these competitors.

Application to your circumstances

Test time

For the purposes of this ruling, the test time for determining if the Company is a qualifying ESIC will be a particular date during the year ending 31 December YYYY.

Current year

The Commissioner has approved to the change in the accounting periods of the Company and its Australian subsidiary from 30 June to 31 YYYY. The commencement accounting periods for both entities are accordingly changed for the ZZZZ income year to periods with a date commencing in the year ending 31 December YYYY up until 31 December YYYY.

For the purposes of subsection 360-40(1), the current income year will be the year ending 31 December YYYY (the ZZZZ income year). For clarity, in relation to particular requirements within subsection 360-40(1), the income year before the current year will be the YYYY income year.

Early stage test

Incorporation or Registration - paragraph 360-40(1)(a)

The Company was incorporated in Australia within the current income year, which is within the last three income years as outlined above, therefore it satisfies criteria 360-40(1)(b)(i). Consequently, paragraph 360-40(1)(a) is satisfied.

Total expenses - paragraph 360-40(1)(b)

In applying the requirements of paragraph 360-40(1)(b), the Company and its 100% subsidiaries must have incurred total expenses of $1 million or less in the YYYY income year, being the income year before the current income year.

The Company and its three 100% subsidiaries were not incorporated in the YYYY income year, and therefore did not incur any expenses the YYYY income year. Consequently, subparagraph 360-40(1)(b) is satisfied.

Assessable income - paragraph 360-40(1)(c)

In applying the requirements of paragraph 360-40(1)(c), the Company and its 100% subsidiaries must have derived total assessable income of $200,000 or less in the YYYY income year, being the income year before the current income year.

The Company and its three subsidiaries were not incorporated in the YYYY income year, and therefore did not derive any assessable income for the YYYY income year. Consequently, paragraph 360-40(1)(c) is satisfied.

No stock exchange listing - paragraph 360-40(1)(d)

In applying the requirements of paragraph 360-40(1)(d), the Company must not be listed on any stock exchange in Australia or a foreign country, at the test time.

The Company was not listed on any stock exchange in Australia or a foreign country during the test time. Consequently, subparagraph 360-40(1)(d) is satisfied.

Conclusion on early stage test

The Company will satisfy the early stage test for the ZZZZ income year, as each of the requirements within paragraphs 360-40(1)(a) to (d) have been satisfied.

100 point test

The Company has not provided sufficient evidence of satisfying the 100 point innovation test under section 360-45 for the year ending 31 December YYYY. Therefore, for the Company to be a qualifying ESIC, it will need to satisfy the principles-based test.

Principles based test

Developing new or significantly improved innovations for commercialisation - subparagraph 360-40(1)(e)(i)

In applying the requirements of subparagraph 360-40(1)(e)(i), the Company must be developing an innovation which is either new or significantly improved for an addressable market.

The Company is a digital asset infrastructure company and its aim is to develop modular data centres (MDCs) for the purpose of partnering with stranded energy assets. If the Company successfully develops its MDC technology:

a.    it will be able to provide access to low-cost data centres; and

b.    the software technology developed and used by the MDCs can be deployed to help solve power issues on a power network.

The Company has identified its addressable markets as:

•         Companies requiring access to data centres - including, at a global scale, companies in the fields of social media, IoT, AI and blockchain which have been seeking new and improved technology to overcome the limits of existing digital infrastructure.

•         Energy providers - including, at a global scale, providers requiring a solution to manage load curtailment issues and match power supplied by stranded energy assets to network demands.

The Company's objective is to solve both domestic and global problems of energy generation and end-user mismatch, by leveraging emerging technology such as EDGE computing, distributed processing networks and off-peak processing to solve traditional and non-traditional computing problems in the fields of social media, Internet of Things (IoT), Artificial Intelligence (AI) and blockchain.

The Company believes that if it successfully develops its technology, the technology could provide flexibility, or 24/7 energy demand, at a large scale by increasing the processing capacity of distributed networks and reducing the high operating energy costs.

The Company believe that they will be the first to offer such a product.

Genuinely focussed on developing for commercialisation - subparagraph 360-40(1)(e)(i)

In pursuit of developing its MDCs, the Company states that it undertook the following work during the 2020 income year:

•         The Company identified several stranded and distressed energy assets. It undertook research and testing to determine at which of these stranded and distressed energy asset sites it can co-locate its MDC solution.

•         The Company designed, built and tested an initial MDC which it believes is able to be deployed in remote locations with extreme climates and weather conditions. Further iterations of the MDC were subsequently being designed and tested (eg modifications relating to components of the MDC to assist MDC performance in extreme weather conditions).

•         The Company investigated and has tested liquid immersion technology to cool its MDCs, rather than using traditional air cooling. This liquid immersion cooling solution could offer power usage effectiveness beyond any currently available solutions/offerings. The Company is currently designing an MDC which incorporates this technology.

Subsequent to the ZZZZ income year, the Company states that it undertook some successful testing.

The Company is attracting external investment on the basis of commercialising its MDC solution and generating a return on that MDC solution.

In the ZZZZ year The Company is operating a number of MDC's which are profitable on a per MDC basis.

Conclusion on subparagraph 360-40(1)(e)(i)

The Company is genuinely focussed on developing its MDC technology for a commercial purpose. The MDC technology will be a significantly improved product compared to existing products available to its target markets.

Therefore, subparagraph 360-40(1)(e)(i) will be satisfied for the time period from the time of the Company's incorporation until 31 December YYYY, or the date when the MDC technology has been fully developed, whichever occurs earliest. Once the MDC technology has been fully developed, the Company will no longer be 'developing' the product for commercialisation and subparagraph 360-40((1)(e)(i) will no longer be satisfied.

High growth potential - subparagraph 360-40(1)(e)(ii)

The Company is developing a MDC technology solution which it seeks to pair with stranded energy assets (for example, gas and coal assets located in remote locations) as a power source to operate the MDC.

As companies in the fields of social media, IoT, AI and blockchain as well as energy provider companies are continuously seeking to improve user experience and overcome the limited processing capacity of distributed networks, the Company believe there is a high growth potential for their MDC technology solution to solve a global problem which existing digital infrastructure has not resolved. By pairing the MDC technology solution with stranded energy assets at remote locations in Australia and other parts of the world, the Company has a high growth and scale potential to sell to companies and end-users globally.

Therefore, subparagraph 360-40(1)(e)(ii) will be satisfied.

Scalability - subparagraph 360-40(1)(e)(iii)

The Company estimates that its operating costs will reduce once it develops its MDC technology (and its research and development, necessary to test and modify the MDC design and configuration winds back), which will enable them to generate increased revenue with a less than proportionate increase in operating costs. This operating leverage has the potential to afford the Company the ability to successfully scale up its business. Therefore, subparagraph 360-40(1)(e)(iii) will be satisfied.

Broader than local market- subparagraph 360-40(1)(e)(iv)

The Company has demonstrated that its MDC technology solution has the potential to address a broader market than just the local market, including international and global markets. Therefore, subparagraph 360-40(1)(e)(iv) will be satisfied.

Competitive advantages - subparagraph 360-40(1)(e)(v)

The Company has undertaken significant research on the state of the market and currently available technology.

The Company believes that its MDC technology solution has four main competitive advantages / key differentiators over its competition (being the existing data centres in the market):

a.    lower upfront capital outlay expenses (CAPEX) costs

b.    access to cheap energy costs (via stranded energy assets)

c.     significantly superior processing capacity

d.    superior power processing capacity.

Therefore, as the MDC technology is the first product which offers these differentiating features, and believes that it will be able to sustain its first mover advantage. The Company has demonstrated the potential for its MDC technology solution to have competitive advantages within the energy generation industry, satisfying subparagraph 360-40(1)(e)(v).

Conclusion on principles-based test

The Company satisfies the principles-based test as it satisfies the requirements within subparagraphs 360-40(1)(e)(i) to (v) for the period commencing from the date of its incorporation until 31 December YYYY, or the date when the MDC technology solution has been fully developed and is ready for sale, whichever occurs earlier.

Conclusion

The Company meets the eligibility criteria of an ESIC under section 360-40 for the period commencing from the date of its incorporation until 31 December YYYY, or the date when the MDC technology solution has been fully developed and is ready for sale, whichever occurs earlier.

[1] See Explanatory Memorandum to the Tax Laws Amendment (Tax Incentives for Innovation) Bill 2016, paragraph 1.76.

[2] OECD Oslo Manual, paragraph 124 and paragraph 151.

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