The Australian government has revealed enhancements to the WET (Wine Equalisation Tax) rebate to assist wine-making, grape growing and tourism associated with regional Australia. These reforms come after 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 a minimum of 85% of grapes at the crusher used in making the wine and also maintain ownership throughout the entire wine-making process;
– the rebate is limited to packaged, branded wine in containers less than 5 litres and must be branded with the registered trademark for retail domestic sale;
– the rebate claim must be linked better to WET paid.
The new eligibility criteria will apply from 1 July 2018.
The WET rebate cap to be reduced to $350,000 from $500,000 with effective from 1 July 2018 (a year later) and a is a higher cap than what was previously announced in 2016 Budget. To encourage more wine tourism, up to a further $100,000 per year will be available to wine producers who exceed the rebate cap using a new Wine Tourism & 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.
Contact Solve Business Accountants located on the Gold Coast, Qld Australia if you need help with your business tax.