Taxation Policy
Wine is taxed more heavily in Australia than in any other major wine producing nation, and WFA makes it a priority to contribute to the recurring debates around taxation policy and clearly state the wine industry’s position.
WFA was the primary driver of an advocacy campaign which led the Federal Government to introduce then extend a rebate scheme which effectively exempts small wineries from the 29% Wine Equalisation Tax (WET), which is levied on the last wholesale price of all wine sales.
During 2009/10 we also played a key advocacy role against suggested changes to the WET, which led to the Australian Government not adopting the recommendations of the Henry Tax Review. See
media release
The WET Rebate recognises the importance of small wineries to the economic prosperity of many parts of regional Australia and has been a major factor in keeping a number of wineries viable. Even with the rebate, however, the Federal Government collects around $650 million a year in WET, on top of the general business taxes which also apply to wine businesses.
WFA Policy
WFA’s current taxation policy is that:
- the Australian Government should adopt a change such that the reference to the Income Tax Assessment Act 1997 is replaced with a reference to Corporations Law, which would deem entities to be an associated producer if one of them:
- controls more than 50% of the issued capital; or
- controls more than 50% of the Board of Directors or
- can cast, or control the casting of, more than 50% of votes at AGM
- the Wine Equalisation Tax (WET) rebate status quo be maintained, namely that the 29% ad valorem tax on domestic wine sales be rebated up to a maximum annual rebate per wine entity of $500,000;
- there be a change to the tax system provisions whereby wine businesses with a turnover of less than $8 million, who are remitting both GST and WET, have the option of complying on a cash or accrual accounting basis;
- continuance of each of the Grape Research, Wine Export Charge and Wine Grapes levies is strongly supported as being vital to the future development and sustainability of the Australian wine sector; and
- FBT should not apply to business meal expenditure which is a legitimate business expense.
Who do I contact?
Paul van der Lee, Manager, Economics & Policy
Telephone: 08 8222 9255
Email: paul@wfa.org.au