Complete business activity and instalment activity statements in Australia

Wine Equalisation Tax

What is Wine Equalisation Tax?

Wine Equalisation Tax (WET) is a value-based tax that generally applies on the last wholesale sale of wine, usually the transaction between a wholesaler and a retailer, and is calculated before GST. However, it also applies to some retail sales (for example, cellar door sales or retail sale of repackaged bulk wine) and to wine that is applied to a person's own use (for example, wine tastings and promotions). If the taxpayer makes wine or imports wine for consumption in Australia, or if the business sells wine wholesale, WET will normally be payable.

WET is paid through the BAS with the applicable fields being 1C for the WET payable and field 1D for any credit that may be due.

WET-related Beverages

WET only applies to certain types of products that have an alcohol content of over 1.15%. Specifically WET applies to grape wine, grape wine products, fruit or vegetable wine, cider, sherry, mead and sake. WET applies to both bulk and packaged wine.

WET does not apply to beer, spirits, liquors, or to beverages that do not contain more than 1.15% by volume of ethyl alcohol.

Who is Liable for Wine Equalisation Tax?

To be involved in the WET system, the business must be registered for GST and have a WET business account so the WET section on the BAS can be completed.

If the business is neither registered nor required to be registered for GST, WET does not need to be paid other than for imported wine.

WET is generally paid by wine producers, wholesalers or importers, rather than retailers. If the business is a retailer, WET is usually already included in the price paid for these products. In other words, WET forms part of the cost base and is passed on to end- customers in the retail price of the product.

Some wine supplies may be exempt from WET. For example, if the business intends to make a further wholesale sale of wine, they can legally defer paying WET by quoting their Australian Business Number (ABN) when the wine is purchased.

If the dealing is GST-free, generally WET is not payable.

Assessable Dealings

If the business makes wine or imports wine for consumption in Australia, or if it is sold wholesale, WET would normally have to be paid. Transactions that attract WET are known as "assessable dealings"

For the dealing to be assessable, it must occur when the wine is in Australia and the entity that has the dealing must be registered, or required to be registered, for GST.

1. What is Wine Equalisation Tax (WET) and on what beverages does it apply?