To qualify as an Early Stage Innovation Company (ESIC), there are two areas you must satisfy, these are:
- Early stage test - proves you qualify as an early stage company
- Innovation test - proves you’re conducting innovative activities as viewed by the ATO
As part of the Innovation Test, you are required to meet one of the following tests:
- 100 point test
- Principles based test
The 100 Point Test
This test looks at certain factors which can fast track your ESIC self assessment including previous R&D Tax Incentive claims, participation in a qualifying accelerator program, and more.
If you do not pass the 100 point test, there is a second test called the principles based test which you may qualify for.
The Principles Based Test
This test asks more subjective questions around the type of business you are and the activities you are undertaking. This test requires more consideration and is where an ATO ruling is most helpful. A company seeking ESIC status through the principles based test will need to look at things such competitive edge, ability to scale, and high growth potential.
Using Nifty Grants to undertake these tests
The Nifty ESIC service will take you through the process of assessing your company for ESIC status - the early stage test and the innovation test (either completing the 100 point or principles test).
Where a ruling is recommended, your submission will be reviewed by a PwC specialist before being processed with the ATO. Upon successful review and verification from the ATO, you’ll be provided with documents that verify your ESIC status.