The Australian Taxation Office (ATO) is ramping up compliance action to protect the integrity of the excise remission scheme for alcohol manufacturers.
Introduced in 2021, the scheme allows eligible domestic alcohol manufacturers to automatically claim a remission for the first $400,000 of excisable alcohol they manufacture each financial year, making those goods free of excise duty.
Where the ATO identifies businesses claiming concessions they are not entitled to, it will take swift action to recover unpaid excise and ensure the correct treatment is applied.
Businesses must be able to clearly demonstrate their eligibility and maintain robust records to support their claims. Those unable to substantiate their entitlement may face significant excise liabilities, penalties and ongoing compliance scrutiny.
The ATO encourages alcohol manufacturers to review their eligibility for the remission and ensure their arrangements comply with excise laws.
Members of the community, manufacturers, or suppliers who may be aware of illicit alcohol activities can report through the ATO app, by completing our online tip-off form at ato.gov.au/tipoff or by calling 1800 060 062. Tip offs can be made anonymously.
Targeted compliance action already in place
Since July 2026, the ATO has expanded targeted compliance activities aimed at high-risk arrangements and behaviours that threaten the integrity of the scheme, including:
- whether a business truly operates independently from other alcohol manufacturers, particularly where businesses share premises, equipment or key personnel
- contract manufacturing arrangements, including confirming who is responsible for the manufacturing process
- whether products are being genuinely distilled or brewed, rather than created by simply diluting alcohol
- whether a business is meeting the “still ownership” test, and
- scrutinising bulk ethanol movement data and tip-offs provided by industry to identify businesses not manufacturing alcoholic beverages, not paying the correct excise duty or operating outside legal requirements.
Strengthening entry into the excise system commencing September 2026
Commencing September 2026, the ATO will introduce enhanced assurance activities for businesses seeking to enter the excise system, including:
- targeted pre-licensing reviews to verify manufacturing operations before new alcohol manufacturing licences are granted
- targeted reviews of newly approved licence holders where arrangements involve shared premises, common individuals or key personnel with specialised alcohol manufacturing expertise, such as distillers or brewers, and
- updated guidance for new excise participants, including refreshed information about scheme eligibility requirements.
Early intervention for new businesses commencing October 2026
Commencing October 2026, businesses new to the excise system can expect greater scrutiny from the ATO during their first 2 years of operation.
Introduction of targeted first-year reviews of businesses making claims through the scheme to assess ongoing compliance with legal and economic independence requirements and identify eligibility concerns early, and
Targeting businesses making claims through the scheme that do not have an operational still installed after the first 2 years of claiming the concession.
Quotes attributable to ATO Deputy Commissioner Dr Rowan Fox:
- ‘The excise remission scheme for alcohol manufacturers was established to support genuine Australian alcohol manufacturers, not businesses that structure their affairs to gain concessions to which they are not entitled.’
- ‘Businesses or promoters that deliberately seek to rort the scheme undermine its integrity and disadvantage competitors who are complying with the law. It’s not about if you’ll get caught, it’s when.’
- ‘We’re focusing in on businesses entering the scheme that appear connected to existing manufacturers. Large liquor sellers cannot control a series of smaller businesses to game the remission scheme’s caps.’
- ‘Our objective is to identify potential risks before they become entrenched and ensure only eligible businesses gain access to these concessions from the outset.’
- ‘Protecting the integrity of the remission scheme is critical to maintaining a fair, sustainable and trusted excise system for the entire industry.’
Notes to journalists
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