Update to EMDG

On 1 April 2020, the Federal Government announced a $49.8 million increase in funding for the Export Market Development Grant (EMDG) scheme, allowing exporters and tourism businesses to get additional reimbursements for costs incurred in marketing their products and services around the world.

What is EMDG?

EMDG is designed to encourage small and medium sized Australian businesses to increase their exports.

  • Reimburses up to 50% of eligible export expenses above $5,000 up to a maximum of $150,000 in a financial year (for a group of related companies the total is $250,000 per year).
  • Each applicant is entitled to a maximum of eight annual grants

Who can apply?

Types of entities

·         Australian residents including individuals, partnerships, companies, associations, co-operatives, statutory corporations, groups and trusts that have carried on export promotion activities during the grant year.

·         Organisation that have been approved for the grant (approved bodies and joint ventures).

Types of activities

Export promotion activities includes export of goods or services, inbound tourism, export of intellectual property and know-how and conference and events in Australia.

Business turnover

The business must annual turnover of less than $50 million and spend at least $15,000 on eligible export promotion expenses.

Principal

Be the principal (rather than agent) for exporting the products and promoting it to overseas market (unless it is a non-profit export-focused industry body).

Promoted product

To qualify for an EMDG grant, the business product must have promoted for export purposes and must be one of the following:

  • Goods made in Australia.
  • Imported goods where Australia will derive a significant net profits from its overseas sale (need to do a submission for approval).
  • All services except those specified as ineligible in the EMDG Regulations.
  • Inbound tourism.
  • Conferences or events held in Australia.
  • Intellectual property right and know-how that mainly resulted from work done in Australia.
  • Trademark that was owned, assigned or first used in Australia.
  • know-how that mainly resulted from work done in Australia

 

 

 

What can be claimed?

Eligible export expenses include:

Overseas representation expenses (To a maximum of $200,000)

·         All reasonable costs that you pay to have an overseas representative act on your behalf on a long-term basis to market/promote your product

·         The portion of the fee or expense paid to your overseas representative that relates to promotion of your Australian products. You cannot claim the costs of commission, or non-promotional activities your representative carries out for you, such as supplying after-sales service, post-contractual training, sourcing of products, arranging clearance, warehousing or collection of goods, importing or promoting ineligible products

Marketing expenses (to a maximum of $50,000) including marketing consultants and marketing visits

·         The cost of engaging an arms-length consultant to undertake export market research or marketing activities

·         The cost of air travel during the marketing visit, including departure taxes (only 65 per cent of first-class airfares may be claimed).

Free sample expenses (to a maximum of $15,000)

  • The cost of providing free samples of the product you are promoting for export
Trade fairs, seminars, in-store promotion expenses

  • External costs directly related to participating in an international trade fair, seminar, in-store promotion, international forum, private exhibition, or similar activity.
Promotional literature and advertising expenses

  • External costs of promotional material, such as brochures, videos, advertising and website development.
Overseas buyers (to a maximum of $7,500 per buyer per visit up to a total of $45,000)

  • The cost of bringing potential buyers who are non-residents to Australia for an eligible export promotion purpose
IP registration and related insurance (to a maximum of $50,000)

  • The cost of granting, registering or extending rights under foreign laws in relation to eligible intellectual property.
  • The cost of obtaining insurance to protect these rights.

 

Ineligible expenses – you cannot claim expenses that:

  • Were incurred by a related business entity
  • Relate to business with the Democratic People’s Republic of Korea (North Korea) and New Zealand
  • Are not promotional (such as product development/refinement, sourcing and financing)
  • Were incurred by you when you were not a resident of Australia
  • Relate to after-sales activities
  • Have or will be subject to reimbursement by a third party (other than EMDG)
  • Relate to an illegal or unlawful activity
  • Are commissions or discounts
  • Are in payment of an Australian tax, levy or charge (except Australian departure tax)
  • Relate to any form of pornographic material with a classification equivalent to the X-rating for films