WET is a value based tax paid on certain dealings with wine in Australia, including wholesale sales and untaxed retail sales. The rate of WET is 29% and is charged:
- on the wholesale selling price of wine (excluding WET and goods and services tax) at the last wholesale sale, and
- on a notional wholesale selling price on retail sales of untaxed wine.
Australian wine manufacturers, wine wholesalers and wine importers are usually liable to pay WET and they make their payment to either the Australian Tax Office or Australian Customs Service.
What does the term ‘wine’ include?
When we say ‘wine’ we are referring to:
- grape wine
- grape wine products
- fruit or vegetable wine
- mead
- cider
- perry, and
- sake.
Wine does not include:
- products with 1.15% or less alcohol by volume
- beer
- spirits
- liqueurs
- designer drinks, and
- ready-to-drink products.
What is the producer rebate?
The producer rebate is for wine produced in New Zealand that is subject to a dealing in Australia. Under the scheme you are entitled to a rebate of 29% of the selling price of the wine. The selling price does not include expenses that are not related to the production of the wine in New Zealand.
The producer rebate scheme for New Zealand wine producers started on 1 July 2005. It applies to dealings with wine in Australia on which WET is paid after that date.
To be eligible for the producer rebate, you must:
- produce wine in New Zealand that is (or is likely to be) exported to Australia, and
- be approved as a New Zealand participant.
You are a producer if you:
- manufacture the wine, or
- supply another entity with the grapes, other fruit, vegetables or honey from which the wine is manufactured (contract winemaking).
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To apply for approval to be a New Zealand participant, complete an Application for approval as a New Zealand participant for a wine equalisation tax (WET) rebate (NAT 15344). To obtain a copy of this form:
- phone the NZIR on 0800 377 774, or
- visit the New Zealand Inland Revenue (NZIR) website at www.ird.govt.nz
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To claim the rebate you must:
- register as a New Zealand participant
- complete and submit a refund application, and
- include supporting documentation with your claim to show that WET has been paid.
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Your claim must total at least $200.
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What supporting evidence do I need to claim the producer rebate?
Wine sold to an Australian importer
If you sell wine to an Australian importer, you must have:
- your New Zealand sales invoices
- New Zealand Customs export entries to show the wine is exported from New Zealand
- Australian Customs import entry numbers to show the wine is imported into Australia.
documentation to show that WET has been charged, including either
- Australian tax invoices
- a wholesalers’ statement, or
- an Australian Customs import entry or entry number if the WET was charged at importation, and
- a worksheet showing how the rebate claim has been calculated.
Wine sold to a person in New Zealand who sells to an Australian importer
If you sell wine to a person in New Zealand who sells wine to an Australian importer, you must have:
- your New Zealand sales invoices
- New Zealand sales invoices for sales of wine to the Australian importer
- New Zealand Customs export entries to show the wine is exported from New Zealand
- Australian Customs import entry numbers to show the wine is imported to Australia
- documentation to show that WET has been charged, including either
- Australian tax invoices
- a wholesalers’ statement, or
- an Australian Customs import entry or entry number if the WET was charged at importation, and
- a worksheet showing how the rebate claim has been calculated.
Wine imported into Australia and sold in Australia
If you import the wine into Australia and sell the wine in Australia, you must have:
- New Zealand Customs export entries to show the wine has been exported from New Zealand
- Australian Customs import entry numbers to show the wine has been imported to Australia
- documentation to show that WET has been charged, including either
- Australian tax invoices, or
- an Australian Customs import entry or entry number if the WET was charged at importation, and
- a worksheet showing how the rebate claim has been calculated.
How do I calculate the producer rebate?
To calculate the producer rebate, you must work out 29% of the approved selling price; that is, the price you sold the wine for, less:
- Australian or New Zealand taxes, and
- any expenses that are not related to the production of the wine in New Zealand.
Expenses that are not related to the production of the wine in New Zealand are costs that you would not incur if you produced the wine in Australia, such as:
- transportation
- freight
- insurance
- agents’ fees, and
- other costs associated with importing the wine into Australia.
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If the figures you use to calculate the producer rebate are expressed in a currency other than Australian dollars, you must convert the figures to Australian currency before making your claim.
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Example: Calculation of approved selling price and rebate
Kiwi Wines Pty Ltd a wine producer that manufactures wine in New Zealand sells a shipment of the wine to an Australian importer. Kiwi Wines charges the importer NZ$6,500 (excluding any taxes) for the wine. The charge includes expenses of $100 for freight and insurance to transport the wine to the shipping dock. The importer meets the shipping costs to Australia. The importer makes a wholesale sale of the wine and pays WET on the sale.
Assuming the exchange rate that applies is A$1 = NZ$1.06, the approved selling price is calculated as follows:
Assume the exchange rate that applies is
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A$1 = NZ$1.06.
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Approved selling price is calculated as follows:
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NZ$6,500
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Less freight and insurance to the shipping dock (expenses unrelated to the production of the wine in New Zealand)
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NZ$100
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NZ$6,400
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Conversion to Australian currency (a$1=NZ$1.06)
NZ$6,400 x 1/1.06 = a$6,037
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Rebate is calculated as:
approved selling price
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A$6,037
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Rebate at 29%
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A$1,750
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When can I claim my producer rebate?
You can claim your rebate after the end of the financial year (30 June), in which a dealing with wine on which WET was paid occurs.
If you are claiming for the 2005–06 Australian financial year (1 July – 30 June) the maximum rebate you can claim is $290,000. For every financial year after, the maximum rebate you can claim is $500,000.
If you are an associated producer of one or more other producers (they may be Australian producers and/or New Zealand producers), the maximum rebate you are entitled to as a group for the 2005–06 is $290,000. For every financial year after, the maximum rebate you can claim as a group
is $500,000.
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If you are unsure whether you are considered to be an associated producer, contact NZIR on 0800 377 774.
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When am I not entitled to a producer rebate?
You are not entitled to the producer rebate if, at the time of the claim, you knew or should have known that the wine was or was to be exported from Australia.
You cannot claim the producer rebate if the rebate has previously been paid on the wine.
The producer rebate is considered to be income for New Zealand income tax purposes and must be returned in the income year in which the amount is received.
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More information
- For more information about the producer rebate or WET:
- visit the New Zealand Inland Revenue (NZIR) website at http://www.ird.govt.nz
- email the NZIR at WET.rebate@ird.govt.nz
- phone the NZIR on 0800 377 774
- send a fax to the NZIR on (09) 984 3110, or
- write to the NZIR at:
WET rebate
PO Box 33150
Takapuna NZ 0740
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Last Modified: Tuesday, 13 June 2006
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