Australian Grant Solutions
Australian Grant Solutions (AGS) was established in 1992 to assist Australian businesses to access the Export Market Development Grant (EMDG). Today we also consult on the Research and Development (R&D) Tax Incentive. Whether you are a small or medium business, you deserve the same government assistance that your competitors receive. The problem is, if you’re busy with the day-to-day operations of your business, you may miss an opportunity because you don’t know it’s available. Or if you submit an application on your own, you risk minimising your entitlement – getting everything right can prove challenging.
What sets us apart is the way our clients receive a larger return on the investment they make in seeking assistance. This happens because our knowledge of grants, incentives and government assistance is second to none; we are very thorough in our approach; and our applications are first class. Our fees are also success-based. This means we are working with you not for you. It’s in our best interest to maximise your grant.
The aim of the EMDG Scheme is to encourage Australian businesses to seek out and develop export markets for their products and services.
The Export Market Development Grants (EMDG) Scheme is administered by the Australian Trade Commission (Austrade). This (EMDG) scheme is a key Australian Government financial assistance program for aspiring and current exporters.
The scheme provides for a partial reimbursement of 50% of eligible export marketing costs over $15,000.
The minimum grant amount is $5,000, whilst the maximum grant is $150,000 (from 1 July 2010). Successful applicants will receive one minimum grant of $5,000, provided they have spent more than $15,000 on claimable marketing.
Eligible expenses include those incurred by Australians in promoting the export of goods, services, industrial property rights and know-how, which are substantially of Australian origin. Inbound tourism and education providers also qualify for EMDG support.
New Zealand is not regarded as an eligible market for EMDG purposes.
The Scheme is non-discretionary which means that if you meet the eligibility criteria and maintain appropriate supporting documentation verifying your expenditure and activities, you may be paid a grant.
First-time claimants must also satisfy certain “grants entry requirements” as a prerequisite to obtaining their first grant. This grants entry test is not applicable in subsequent years and was introduced to ensure that intending grant claimants are suitably prepared for export and possess the necessary financial resources to sustain their export endeavours.
Who is entitled to apply?
Any Australian resident – company, partnership, or sole trader – may apply for grants if they incur eligible marketing expenditure in seeking or developing overseas markets. Claimants must have a gross turnover less than $50m (from 1 July 2010) to be eligible for EMDG assistance.
For what products can I apply for a grant?
A product must be substantially of Australian origin to be eligible for an export grant. Eligible products and services include:
- Goods made in Australia
- Goods made outside Australia (i.e. – manufactured overseas) which have significant net benefit to Australia (special conditions apply)
All services (external and internal) are eligible for EMDG with the following exceptions:
- A service relating to migration to Australia, including proceedings or actions to enter or remain in Australia;
- A service relating to:
- The adoption, custody or welfare of a child; or
- Proceedings about the maintenance of a person, except under a deed, trust or will; or
- Proceedings under the Family Law Act 1975;
- A service relating to the identification, procurement, lease, sale or purchase of assets in Australia (whether tangible or intangible) including cash, real estate, stocks, options or shares.
- A service relating to the protection, operation or maintenance of assets held in Australia;
- A service relating to compliance with the laws of Australia;
- A service relating to prostitution;
- A service relating to pornographic material, including pornographic material in publications, films, computer games or accessible on the Internet;
- A service relating to illegal activities or illegal products;
- A gambling service provided by a service provider not licensed under an Australian law;
- A service not mentioned in Schedule 1 that is provided to a foreign resident tourist in Australia;
- A service related to providing accommodation for foreign students studying or working in Australia;
- A service related to selecting or recruiting foreign students to work in Australia.
- Trademark owned, assigned or first used in Australia
- Intellectual Property rights resulting from substantial research or work done in Australia
- Know-how resulting from substantial research work done in Australia
We will meet with any potential applicant to determine EMDG eligibility and assist in marketing the EMDG application.
The R&D Tax Incentive allows companies to claim a deduction from their taxable income of $1.50 (or $1.33 for companies with a turnover of greater than 20 million) for every $1 spent on eligible R & D activities. It is administered jointly by the Industry Research & Development (IR&D) Board (through AusIndustry) and the Australian Taxation Office (ATO).
Companies must be registered with the IR&D Board in order to claim the incentive. Registration is available to any eligible company incorporated in Australia, and applications must be lodged annually within ten months of the end of the company’s year of income.
Making a claim is a two-stage process. An application for registration must first be made with AusIndustry. On receipt of a registration number, the R&D Claim entry for your company tax return can then be lodged.
Who is entitled to apply?
All companies incorporated in Australia and undertaking eligible R&D activities are entitled to apply.
Trust partnerships and trusts cannot apply. Companies that are acting in the capacity of a trustee or nominee (other than in the capacity of a trustee of a public trading trust) cannot claim the R&D Tax Incentive.
Definition of R&D
A broad outline of what R&D means according to the Income Tax Assessment Act and the AusIndustry guidelines is mentioned below. Please note that this is just an overview and a full definition of what R&D means is actually more thorough than this. Should you need further clarification and wish to discuss your business activities further, then please call one of our consultants.
Under section 73B of the Income Tax Assessment Act 1936, the legislative definition of R&D is as follows:
Research and development activities means:
(a) systematic, investigative and experimental activities that involve innovation or high levels of technical risk and are carried on for the purpose of:
- acquiring new knowledge (whether or not that knowledge will have a specific practical application); or
- creating new or improved materials, products, devices, processes or services; or
(b) other activities that are carried on for a purpose directly related to the carrying on of activities of the kind referred to in paragraph (a).
To establish an activity was experimental there needs to be evidence that the tests were undertaken to discover something unknown, to test a hypothesis (that is, in the context of the R&D Tax Incentive, a proposed solution to a technical problem) or to find something out, not simply to confirm something already known or to demonstrate an already known fact.
Companies need to show that the R&D activities were undertaken with the main purpose of creating new knowledge, or new or improved materials, products, devices, or processes. It is not necessary to actually achieve the purpose.
We will meet with any potential applicant to determine the R&D eligibility and assist in maximising their R&D Tax Incentive claim.