This ruling clarifies Austrade’s Policy
position for those cases where an overseas representative incurs expenses on the
following activities and where the $200,000 overseas representation capping is
Such expenses may be claimed at either item
1 or at other items within the section 33 table.
Expenses at item 1 are capped at
Item 1 of the section 33 table includes
expenses incurred by the applicant in:
maintaining the overseas representative; and
meeting the expenses incurred by the overseas representative in
soliciting business for the applicant.
This ruling defines the type of expenses
which are to be assessed in categories (a) and (b) of this item 1, those which
are to be assessed elsewhere in the table and those which are
The July 1997 administrative guidelines
state that the general eligibility principle is that expenses of participating
in trade fairs and the provision of advertising material/promotional literature
will be assessed at item 1 if the overseas representative incurs the expenses in
the first place.
This ruling amends that particular
Item 1 (a) of the section 33 table includes
in-house expenses such as salaries and fees. It includes rent and motor vehicle
Item 1 (b) of the section 33 table includes
fares and travel costs for the overseas representative and staff, communications
costs for the representative, market research and consultants.
Where the expenses are paid by the overseas
representative to an independent third party and are for the applicant’s
participation in a trade fair or for the applicant’s provision of advertising
material or promotional literature, you may elect to claim them either at item
1(b) or at item (5) of the table.
Where the representative is also a
distributor, Austrade may assess any expenses of trade fairs and the provision
of advertising material or promotional literature incurred by the representative
to be item 1(b) type expenses on the basis that the activity is that of the
representative rather than the applicant.
Applicants cannot claim expenses of an item
1(b) type at items 2 and 3 of the table (marketing visits and communications
respectively ) where they relate to
the expenses and activities of an overseas representative. Conversely, Austrade
will not include within item 1(b) those expenses incurred by the representative
which were made on the applicant’s behalf such as paying for fares for the
applicant’s Australian-based staff during overseas visits.
Austrade will not allow under item 1 any
expenses which are not for soliciting business. Examples of such expenses are
patent expenses (also ineligible because of section 41) and designing and
selecting export packaging.
Austrade will also ensure that only genuine
overseas representation expenses will be allowed in item 1. Where an applicant’s
expenses are incurred through an overseas representative and are not expenses
eligible elsewhere in the section 33 table, Austrade may apply section 96 to
adjust eligible expenses. It is not the intention of the legislation to allow
expenses in item 1 where those expenses would ordinarily be expected to be
incurred in Australia.