WET 2016/34 - Explanatory statement

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Australian Government

A New Tax System (Wine Equalisation Tax) Act 1999

Explanatory Statement

General outline of instrument

1. This instrument sets out the time when a claim for the wine equalisation tax (WET) producer rebate may be made by eligible New Zealand wine producers. This instrument may be cited as the Wine Equalisation Tax New Zealand Producer Rebate Claim Lodgment Determination (No. 34) 2016.

2. The authority for this instrument is provided by subsection 17-10(2B) of the A New Tax System (Wine Equalisation Tax) Act 1999 (WET Act).

3. This Determination replaces Wine Equalisation Tax New Zealand Producer Rebate Claim Lodgment Determination 2006 (the previous instrument). The replaced instrument is repealed on the commencement of this determination.

4. The instrument is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

Date of effect

5. This instrument commences on the day after registration.

What this instrument is about:

6. Under the WET Act, eligible wine producers can claim a WET producer rebate of up to A$500,000 per year. The WET producer rebate was originally only available to wine producers who were registered for goods and services tax (GST) in Australia. However, from 6 June 2006, entitlement to the rebate was extended to include non-GST registered producers of wine in New Zealand that export their wine to Australia and that meet certain eligibility criteria.

7. A WET producer rebate under the scheme for New Zealand wine producers will only be available if, amongst other things, WET has been paid in Australia in respect of the wine subject to a rebate claim. The entitlement to the rebate arises immediately before the end of the Australian financial year in which the WET was paid.

8. A New Zealand wine producer that is eligible to claim a WET producer rebate under the scheme must lodge a claim for the rebate in the form approved by the Australian Commissioner of Taxation, along with specified supporting evidence for the claim. A claim must be lodged within four years after the time when the entitlement to the rebate arises.

9. Although entitlement to the rebate arises immediately before the end of the financial year in which the WET was paid for wine that is the subject of the rebate claim, the legislation provides that the Australian Commissioner of Taxation may determine when claims for the rebate may actually be made. A special claim cycle is required for non-GST registered New Zealand participants as the claim cannot be aligned with lodgment of GST obligations as can occur in the case of GST registered entities.

10. This instrument sets out when a claim for the WET producer rebate may be made under the producer rebate scheme for New Zealand wine producers.

Effect of this instrument:

11. This instrument provides that a claim for a WET producer rebate under the rebate scheme for New Zealand wine producers may be made:

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any time after the entitlement to the rebate arises (ie at the end of the Australian financial year in which WET was paid on the wine); and

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within 4 years of the time that the entitlement to the rebate arises.

12. This instrument provides New Zealand entities with significant flexibility in relation to the time at which they choose to lodge a claim for the WET producer rebate, thereby reducing the costs of compliance for such entities.

13. Compliance cost impact: minor- there will be no or minimal impacts for both implementation and ongoing compliance costs. The legislative instrument is minor or machinery in nature.

Consultation:

14. In 2005, design workshops and information seminars were held with New Zealand wine industry associations and New Zealand wine producers. The ability to claim immediately after the end of the Australian financial year in which the entitlement arises was accepted by all participants.

15. New Zealand Inland Revenue and the Australian Department of the Treasury were also consulted in relation to the development of the previous instrument. As this determination is minor or machinery in nature no further consultation was required.

Statement of Compatibility with Human Rights

This Statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Wine Equalisation Tax New Zealand Producer Rebate Claim Lodgment Determination (No. 34) 2016

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

This instrument sets out the time when a claim for the wine equalisation tax (WET) producer rebate may be made by eligible New Zealand wine producers.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms. It is considered to be minor or machinery in nature. It provides certainty to New Zealand wine producers in relation to when they are entitled to claim their WET rebate.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

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24 February 2016

Timothy Dyce
Deputy Commissioner of Taxation

Legislative References:
A New Tax System (Wine Equalisation Tax) Act 1999
The Act

Legislative Instruments Act 2003
section 26

Related Legislative Determinations:
WET 2016/34