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Our intention is to qualify COIN HARBOUR PTY LTD ABN: 12 624 879 223 as an Early Stage Innovation Company (ESIC) in accordance with Division 360 of the Income Tax Assessment Act 1997.

Review 1

The tax incentives provide eligible investors who purchase new shares in an ESIC with a:

  1. Non-refundable carry forward tax offset equal to 20% of the amount paid for their eligible investments. This is capped at a maximum tax offset amount of $200,000 for the investor and their affiliates combined in each income year
  2. Modified capital gains tax (CGT) treatment, under which capital gains on qualifying shares that are continuously held for at least 12 months and less than 10 years may be disregarded. Capital losses on shares held less than 10 years must be disregarded.

Review 2

To qualify as an ESIC the company must meet the Early Stage Test and either Principles-based Innovation Test OR 100-point Innovation Test requirements.

For an investor to be entitled to the tax incentives, the company must qualify as an early stage innovation company (ESIC) immediately after the new shares are issued to the investor. If the company no longer meets the ESIC requirements after this test time, this won't affect the investor's entitlement to the early stage investor tax incentives.

Review 3

To meet the early stage test, the company must meet four requirements.

These requirements are tested at the point in time immediately after the company issues the shares to the investor. If a company doesn't meet all of the requirements at that time, the investor won't qualify for the tax incentives in relation to those shares.

The four requirements are:

  1. The company must have been incorporated or registered in the Australian Business Register - Pass
  2. The company (plus any wholly-owned subsidiaries of the company) must have total expenses of $1 million or less in the previous income year - Pass
  3. The company (plus any wholly-owned subsidiaries of the company) must have assessable income of $200,000 or less in the previous income year - Pass
  4. 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. - Pass

Review 4

There are five requirements of the principles-based innovation test:

  1. The company must be genuinely focused on developing one or more new or significantly improved innovations for commercialisation. - Pass
  2. The business relating to that innovation must have a high growth potential. - Pass
  3. The company must demonstrate that it has the potential to be able to successfully scale up that business. - Pass
  4. 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. - Pass
  5. The company must demonstrate that it has the potential to be able to have competitive advantages for that business. - Pass