01 · Is EMDG assessable income?

Yes. The ATO treats EMDG grant payments as assessable income in the income year you receive them. Austrade does not withhold tax — your company pays tax on the grant at its normal company rate. Plan cash for the tax bill the year the grant lands, not the year you spent the marketing money.

02 · GST treatment

EMDG payments are not subject to GST because there is no taxable supply between you and Austrade. You still claim GST credits on the underlying eligible expenses as usual — Austrade reimburses the GST-exclusive amount, so your input tax credits remain intact.

03 · Are the matched expenses deductible?

Yes. Eligible export marketing expenses are deductible in the normal course of business in the year you incur them, regardless of when the EMDG grant is received. There is no requirement to net the grant against the expense.

04 · Booking the grant in Xero or MYOB

Set up a dedicated revenue account such as 'Other Income — Grants — EMDG'. Code Austrade milestone payments to this account on the date funds clear your bank. Keep the Grant Agreement and milestone schedule attached to the transaction for audit trail.

05 · Journal entry pattern

Debit Bank, Credit Other Income — Grants — EMDG, on the date of receipt. If you are accruing in line with milestone progress, the offsetting account is Accrued Grant Receivable. Speak to your accountant before accruing — most SMEs recognise on receipt.

06 · What to keep for your accountant

Signed Grant Agreement, milestone payment schedule, each milestone report you submitted to Austrade, bank statements showing the deposits, and the eligible expense evidence pack (invoices, payment proofs, overseas correspondence). Keep for at least five years.

07 · Common mistakes

Netting the grant against marketing expense (overstates net spend and triggers ATO review), forgetting to recognise the grant in the year of receipt, and claiming GST on the grant payment itself. None of these are fatal, but all of them slow down your year-end.