What is the Export Market Development Grant (EMDG)?

There are 2 deadlines to consider:

• 1. 30 November (5 months after financial year end)
     - This deadline applies to self submission and submission using a consultant
  2. 28 February (8 months after financial year end)
     - This deadline may only be used if submitting through an approved consultant

Lets consider 2 different types of tax:

1. GST
   - The EMDG is not subject to GST
2. Income Tax
   - The proceeds from the grant are considered assessable income and do need to form part of your company Profit and Loss

An eligible entity is looking to get back between $10,000 - $150,000 per successful submission.

The first $5,000 of any submission is exempted (taken off the total expenditure) and then 50% of eligible expenditure is paid out to the applicant.

Please note that in certain circumstances AusTrade can pay out less than the 50% if successful claims exceed the amount of funds designated for disbursement.

There are a few factors to consider before using an EMDG consultant:

• Does the R&D entity have > $20M in revenue
  • If Yes then the R&D benefit is not refundable
  • If No, continue readin
• Does the R&D entity have enough losses to drawdown the refundable cash back benefit
  • Yes: your R&D eligible activities would be refundable in cash
  • No: You would be eligible for the tax saving benefit but not the cash back benefit

The reimbursement by the scheme spans between $5,000 - $150,000.

8 separate submissions are available totalling a maximum benefit of $1,200,000

Expenses need to be incurred by the claiming Australian entity.

Payments made by a foreign entity in the group can be claimed but the expense needs to have been incurred by the Australian entity and the Australian entity needs to have funded the payment to the foreign entity.

Generally with structures such as these expert advice should be sought.

Yes, all EMDG submissions are audited. However audit levels vary and often a claimant will not know that there claim was audited before approval

It is likely that a claimant will be aware of 3 - 4 audits of their claims over the 8 claims permitted.

In a first year claim the claimant can claim 2 financial years worth of eligible expenditure.

2nd year claims and onwards the claimant may claim 1 financial year’s worth of expenditure.

The EMDG is a grant and not a tax incentive.

The benefit is not derived via the tax return and the grant is not regulated by the ATO