What is claimable for the EMDG grant?

The Export Market Development Grant (EMDG) scheme provides rebates for a range of export promotion activities conducted by Australian businesses. Eligible Australian exporters can receive up to a 50% reimbursement for promotional expenses over a specified threshold, subject to available funds. The important aspect to remember is that EMDG grants are assessable as taxable income, however, GST will not apply for EMDG grants. The GST component of incurred expenses can’t be claimed under EMDG. This incentive aims to boost Australia’s international trade by helping lower the costs associated with reaching new international markets. Through the EMDG claim, businesses can explore and expand their global footprint, driving growth and innovation within the Australian economy.

EMDG Eligible expenses for the rebate typically include:

1. Overseas Representatives: Costs related to engaging overseas representatives who act on behalf of the Australian business for marketing and promotion activities. The eligible EMDG expenditure can include the monthly retainer fees paid to the overseas representative, as well as any of their international travel expenditure to meet with potential customers. It is important to note that commission payments are ineligible and should not be included with the EMDG eligible expenditure.
2. Marketing Visits: Expenses incurred during overseas trips for business, including the costs of the flights and accommodation, aimed at promoting exports. For many applicants, international and domestic travelling is critical to generate growth in demand for the applicant’s products or services. Austrade deem these expenses eligible within the EMDG, but it is important to note that an apportionment must take place to exclude any portion of the trip that was spent on non-EMDG related activities. Your EMDG grant consultant can assist in calculating the EMDG eligible expenditure on marketing visits
3. Free Samples: Costs associated with providing free samples of the product to potential overseas buyers. This includes the cost price of the goods gifted overseas to potential customers or social media influencers, as well as the associated shipping costs. Importantly, your EMDG grant consultant can assist to calculate the EMDG eligible expenditure
4. Trade Fairs, Seminars, and In-store Promotions: Expenses for participating in trade fairs, seminars, and in-store promotions to market the products or services overseas. This may include costs associated with setting up a booth at a conference or trade show, marketing collateral, promotional materials, and attendance fees.
5. Promotional Literature and Advertising: Costs of creating, publishing, and distributing promotional materials and advertisements targeting foreign markets. For many applicants, this includes digital advertising and social media content, including Google AdWords and Facebook advertising. Recent growth0 in influencer marketing via Instagram 0 also0 eligible to be claimed, as well as email marketing and front-end website design.
6. Public Relations: Expenses related to public relations activities aimed at supporting the promotion of exports. For many applicants, engaging with a PR Consultant can help to grow their brand internationally. The fixed retainer fees and costs associated with their promotion is eligible to be claimed within the EMDG claim.
7. Registration and Insurance of Intellectual Property: Costs for registering or insuring patents, trademarks, copyrights, and designs in foreign markets.0
8. Digital Marketing: Expenses related to digital marketing activities, including website development and maintenance, aimed at promoting exports to overseas markets. As mentioned, the growth in social media content marketing enables Australian businesses to include these promotional expenses within the EMDG eligible expenses. However, it is important to note that apportionments must occur to exclude any portion of the digital marketing expenditure aimed towards the Australian or New Zealand markets. Your EMDG grant consultants can assist with calculating this apportionment based on your marketing data from the financial year.

Determine the Need for Apportionment

Given the EMDG expense categories, apportioning expenses in the EMDG scheme involves allocating costs between eligible export promotion activities and other activities that are not eligible for a grant. This process is crucial for accurately calculating the grant amount you're entitled to.

After determining whether the expense is eligible for the EMDG rebate, apportionment is necessary when an expense is not solely for export promotion. If an expense serves both export and domestic purposes or relates to markets or products not covered by the EMDG, you will need to apportion it.

Methods of Apportionment

The method of apportionment should be logical, fair, and consistent. Here are a few approaches:

• Direct Attribution: Where possible, directly attribute expenses to export promotion activities. For example, if a marketing campaign targets both domestic and international markets, allocate costs based on the campaign's reach to each market. Your EMDG consultant can assist in isolating reports that generate this information from your marketing systems.
• Basis of Sales: Expenses can be apportioned based on the ratio of export sales to total sales. This method is often used for overheads or other indirect costs.
• Time Allocation: For expenses related to personnel, like overseas representatives, apportionment can be based on the time spent on export-related activities versus other duties.

Document Your Apportionment

Keep detailed records of how expenses were apportioned, including the rationale and calculations used. This documentation is vital for audit purposes and to justify your apportionment method if reviewed by Austrade. Your EMDG consultant will assist with this process and present the information to Austrade with your application.

It's important to note that there are specific criteria and guidelines for each type of expense, including caps on amounts that can be claimed, and some activities may require pre-approval. For more information check out our complete guide to the EMDG. Additionally, it is often best to engage with an EMDG grant consultant to guide you on the path of application. Furthermore, businesses looking to apply for the EMDG should carefully review the latest guidelines provided by Austrade, as eligibility and terms can change.

Contact us today and discover how we can support you navigate the EMDG scheme for export success.