Activities » Wine Equalisation Tax (WET) Information » Contractual Arrangements

Contractual Arrangements

The WET Rebate reforms have changed the requirements for WET eligibility.  In order to continue to receive the rebate, you may need to change your operational practices and ensure you keep appropriate records.

The new legislation will substantially tighten eligibility for the rebate. From 1 July 2018, wine producers will be required to own at least 85 per cent of the grapes used to make the wine throughout the winemaking process and the rebate will be capped at $350,000, down from $500,000. This will stop the rebate being claimed multiple times on the same wine through the production chain, where it is subject to blending or further manufacture and then on-sold.

Transitional arrangements apply to wine bottled prior to the 2018 vintage but not sold prior to 1 July 2018. Winemakers should consult written and verbal guidance from the ATO to establish the specific transitional provisions that apply to their pre 2018 vintage stock.

The following information is provided to assist winemakers to identify key areas which are necessary to determine WET eligibility. It is a guide only and winemakers should seek specific guidance and advice from the ATO and financial professionals on their own business circumstances.

Implications for contractual arrangements

  • To be eligible to claim the WET rebate, ownership of the grapes means that evidence of ownership prior to crushing, for example at the weighbridge, must be in place. This may take the form of an exchange of letters or email, but a more formal contract provides more surety. (See Example Contract)

  • Exiting retention of title clauses is likely to mean that ownership does not pass to the grape purchaser at the weighbridge. These clauses are likely to mean ineligibility for the rebate.

  • Some distribution models will require different payment forms. For example, if a producer sells to a distributer, they can quote, but if that distributer on-sells to a further distributer, no rebate will be available, but WET will be payable.

  • Although the intention in the Legislation is for ‘parent’ trademarks to cover all the associated trademarks for the eligibility provisions, this needs to be clarified in the ATO guidance.

  • The transitional provisions are complex and require clear guidance from the ATO.


Code of Conduct

Example Contract


This advice is not definitive, and WFA advises you seek appropriate legal advice.

WFA takes no responsibility for the information contained.