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A tax on tipple
If you make wine, import wine into Australia or wholesale it, you'll generally have to account for wine equalisation tax. Wine Equalisation Tax (WET) is one kind of tax on wine levied at 29% of the taxable value of wine. The taxable value is the actual sale price (excluding WET and GST) for wholesale sales, or a notional equivalent value in other situations.

WET affects wine manufacturers, wholesalers, and importers. Retailers do not have a WET liability unless they make their own wholesale wine. WET is paid as part of the entity's activity statement; the tax period is the same as the entity's tax period for GST which is considered monthly, quarterly or annually.
Who pays it?
The producer rebate scheme entitles wine producers to a rebate of WET for up to $500,000 of domestic sales each financial year. Generally, WET is included in the price that retailers such as bottle shops and restaurants pay when purchasing wine. The retailer is not entitled to claim back the cost of the WET, as the WET is built into the price the retailer pays and then passed on to the consumer.

WET applies to the following alcoholic beverages:

  • Grape wine (including sparkling and fortified wine, marsala, vermouth, wine cocktails and creams);
  • Other fruit wines and vegetable wines (including fortified fruit and vegetable wines);
  • Cider and Perry;
  • Mead (including fortified mead) and Sake.

How much to pay?
As mentioned earlier, WET is 29% of the taxable value of 'assessable dealings', such as sales, imports and own use of wine. For example, the taxable value of a wholesale sale is the price for which the wine is sold (before WET and GST are applied). Depending on individual contracts of sale, the price for which the wine is sold may include things such as freight costs, or may be decreased by settlement discounts or volume rebates.

Tax Shark is Australia's favourite online tax return service. Tax agents like Tax Shark can help you to understand when your company needs to account for wine equalization tax while manufacturing, importing or wholesaling wine in Australia. Tax Shark can also help you understand

  • What is covered or not covered by the producer rebate;
  • Which dealings with wine qualify or do not qualify for the producer rebate;
  • Calculating the producer rebate;
  • Claiming the producer rebate.

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