Wine producers may be entitled to a credit (producer rebate) of the WET amount they have paid on a dealing with wine, or the amount of WET they would have paid on the dealing if the buyer did not quote their ABN.
From 1 July 2018, the maximum amount that can be claimed each financial year is $350,000.
Before 1 July 2018, the maximum amount that could be claimed each financial year was $500,000.
If you are not eligible to claim a rebate, because the wine does not meet the packaging and branding requirements, you still have to pay WET on that wine (unless an exemption applies).
Eligibility for the producer rebate
To claim the producer rebate you must meet eligibility criteria.
Different criteria apply depending on when the winemaking process started. You need to determine whether your wine is:
- 2018 and later vintage wine (more than 50% of the grapes used to make the wine were crushed from 1 January 2018)
- 2017 and earlier vintage wine (more than 50% of the grapes used to make the wine were crushed before 1 January 2018).
Different eligibility rules apply for wine that was in the process of being manufactured into fortified wine on 1 January 2018. For more information, see WETR 2009/2 Wine equalisation tax: operation of the producer rebate for other than New Zealand participants (paragraphs 61AAQ to 61ABC (2017 year and earlier fortified wine)).
2018 and later vintage wine
To be eligible to claim the WET producer rebate you must meet these 4 requirements:
- You're the producer of the wine.
- You are liable to pay WET or you sell the wine under quote to a purchaser who declared in the quote that they will be liable for WET on a subsequent dealing in the wine.
- You own the source product (for example, whole unprocessed grapes, apples, pears, other fruit or vegetables, honey, and rice) that makes up at least 85% of the total volume of the wine throughout the wine making process.
- You sell the wine in a container with a capacity of 5 litres or less (51 litres for cider and perry) that is suitable for retail sale and branded by a trademark owned by you (or an associated entity).
2017 and earlier vintage wine sold or dealt with from 1 July 2018
To be eligible for the WET producer rebate on 2017 and earlier vintage wines sold or dealt with from 1 July 2018 you must meet these 4 requirements:
- You're the producer of the wine.
- You are liable to pay WET or you sell the wine under quote to a purchaser who declared in the quote that they will be liable for WET on a subsequent dealing in the wine.
- You own the source product (for example, whole unprocessed grapes, apples, pears, other fruit or vegetables, honey, and rice) that makes up at least 85% of the total volume of the wine throughout the wine making process.
- You sell the wine in a container with a capacity of 5 litres or less (51 litres for cider and perry) that is suitable for retail sale and branded by a trademark owned by you (or an associated entity).
You are taken to have met the final requirement above if you met all of the following:
- You owned the wine from immediately before 1 January 2018 until you sell or deal with the wine.
- You sell or deal with the wine by 30 June 2023.
- You either
- sell or deal with the wine in a container that displays the vintage of the wine
- placed the wine in the container before 1 July 2018.
If you manufacture wine using wine as an input, you must reduce your claim by any earlier producer rebate amounts claimed for that wine.
Different eligibility conditions apply for the producer rebate if you sold or dealt with 2017 and earlier vintage wine before 1 July 2018.
Meaning of producer
To be a producer you must either:
- manufacture the wine
- provide source product (whole unprocessed grapes, apples or pears, other fruit or vegetables, or honey, and rice) to a contract winemaker to be made into wine on your behalf, where at all times you own the source product and the produced wine.
You are not a producer if, for example, you simply purchase bulk wine and bottle it for sale.
Liability for WET on subsequent dealing
A purchaser will be liable to pay WET on a subsequent dealing with the wine that you sell them under quote if they state in the quote that they do not intend to:
- make a GST-free supply of the wine
- on-sell the wine under quote
- use the wine as an input into manufacture.