14 Apr Wine equalisation tax rebate eligibility changes and cap reduction
The Australian government has revealed enhancements to the Wine Equalisation Tax (WET) rebate to better assist wine-making, grape growing and associated tourism in regional Australia. These reforms come on the back of extensive discussions with the wine industry. The WET rebate was originally intended to support small wine producers in rural and regional Australia. However, the wine industry claims the rebate has contributed to excessive wine grape production resulting in low value wine and urgently needs reform.
The key changes to the eligibility criteria for the WET rebate scheme are as follows:
– eligible producers must own 85% of the grapes at the crusher used to make the wine and maintain ownership throughout the wine-making process;
– the rebate will be limited to branded packaged wine in a container not exceeding 5 L and branded with a registered trademark for domestic retail sale;
– the rebate claims must be better linked to the WET being paid.
The new eligibility criteria will apply from 1 July 2018.
The WET rebate cap will be reduced from $500,000 to $350,000 effective from 1 July 2018, which is a year later and a higher cap than what was announced in the 2016 Budget. In an effort to encourage more wine tourism, up to a further $100,000 per annum will be made available to producers who exceed the rebate cap through a new Wine Tourism and Cellar Door grant.
The changes to the WET rebate are estimated to raise $300m in revenue over the next four years. The changes will apply equally to producers of cider, perry, sake and mead. The changes will also apply to New Zealand wine producers who claim the rebate under trade agreements.