Dynamic Export

Travel expenses: Airfares and transport qualify as eligible expenditure. Special conditions apply to first class travel and relatives travelling together. Accommodation, entertainment and meals for travel overseas are not eligible. However, a per diem of $300 per person for a maximum of 21 days per trip is permissible.

Promotional literature and advertising: Preparation, printing and distribution of brochures, catalogues, leaflets etc qualify as eligible expenditure. Costs of advertising in newspapers, radio, television and other media are eligible. The costs involved in creating and maintaining a website for international marketing will also be eligible.Trade fairs and promotional events: Costs of participating in trade fairs, seminars, in-store promotions, international forums, private exhibitions and similar promotional events are eligible. This includes space, stand, and hire of facilities and other associated costs.

Free samples: The actual cost of the provision of free samples to persons outside Australia, including freight, is eligible. Samples must be given away completely free of charge and cannot be related to the level of sales achieved.

Overseas representation: The costs of maintaining an overseas representative on a long-term basis—including salaries, rent, travel costs, allowances, but not commissions—are eligible. An overseas representative could be an employee, a related entity or an independent person. Austrade expect a high level of documentary evidence to support claimed expenses. Often this expenditure is apportioned for non-promotional activities. A maximum of $200,000 expenditure can be claimed.

Marketing consultants: Costs of engaging an independent consultant, either in or outside Australia, are eligible to the extent that the consultant undertakes market research or other marketing activities. Eligible costs include fees and expenses, but not sales expenses. A maximum of $50,000 can be claimed for all consultant expenditure.

Communications: Costs of overseas telephone, fax and email, as well as costs of communication in transit qualify for reimbursement. These costs are apportioned and generally the exporter must maintain some basis of apportionment. Alternatively, if communication costs are not claimed, the grant will automatically be increased by three percent.

Overseas buyers: The costs of bringing overseas buyers to Australia including fares, accommodation and meals qualify. There is a limit of $7,500 per buyer and an overall limit of $45,000 per grant year.

Patents and trade marks: The costs involved in registering and maintaining international patents and trade marks are eligible.

Becoming grant ready

Businesses must plan their approach to claiming an export grant. This involves ensuring that it can substantiate that it is eligible to receive a grant, that its products are eligible, and that expenditure to be claimed is eligible. In most cases, this should not be difficult if the business maintains good accounting and business records.

A business that intends to claim EMDG will need to ensure that it has records to support expenses being claimed and evidence that the expense is for international marketing. For example, to claim travel costs, the business would need evidence of the fares being claimed, usually a tax invoice from a travel agent, evidence of payment and evidence that the purpose of the travel was to promote the business’ products, perhaps a diary or record of activities undertaken.

In addition, evidence is required to substantiate the number of days travelling to claim the $300 per diem, for example boarding passes plus a travel diary.It is recommended that businesses seek professional advice to ascertain what records are required to support expenditure. Many export consultants provide a kit to provide detailed information on documentary requirements and to allow easy collation of expenses and supporting evidence.

Applying for a grant

Most grants require a specific form to be completed within a certain timeframe. EMDG is a retrospective grant that may be claimed at the end of the financial year. Applications can be lodged after 30 June, with a deadline of 30 November for the previous year’s expenditure. The only exception is for first time applicants that may claim for the two previous years in the first application.

The EMDG application is a four-page form, but Austrade also require completed schedules for each category of expense with each item of expense listed. For example, the travel schedule requires details of who travelled, where and why they travelled, dates of departure and arrival, details of fares including date paid and how paid, amount of fares being claimed and amount of daily allowance being claimed: this information is required for each trip.Once completed, the application and schedules are lodged with Austrade, which will assess the application.

This may involve an audit process where an Austrade officer will visit the business’ premises to review the eligibility of the business and its products, and review the documentation for claimed expenses.

After Austrade have completed the assessment, provided the business and its products are eligible, a notification of the amount of grant approved will be issued and payment of the grant made.

Costs of grant preparation

There can be considerable time involved in collating the necessary documentation, preparing the application form and participating in an audit and there is a cost to this, as there is in the cost of seeking professional assistance. The cost will vary depending on the complexity of the business and its activities, the amount of documentation collated and included in the application, and the preparation of additional information that may be required to support the application.

It is important that businesses plan their use of export grants around their planned international marketing strategy. It is not worthwhile lodging a grant for $10,000 in your first year when you plan to spend sufficient funds on international marketing to achieve maximum grants in future. By claiming a small grant now, your business might well miss out a far larger grant in the future due to the limit on the number of grants that each business can receive.

Likewise, the time and effort involved in claiming a relatively small grant may be greater than the benefit. In this circumstance, speak to an export consultant and they can advise on strategies to maximise the benefits from grants.

—Gary Cronin is managing director of Exportise (www.exportise.com.au), a grants consultancy firm whose consultants are members of the Export Consultants Association.

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