The Turnbull Government has released an implementation paper on tightened eligibility criteria for the Wine Equalisation Tax (WET) rebate.
In the budget announced earlier this year, the government said it would address integrity concerns with the WET rebate and eliminate access to the rebate for unintended recipients.
A recovery plan which included changes to the WET rebate and a substantial global investment strategy to restore confidence across the industry was offered at the time.
However, Des Caulfield, a director at business advisery firm MGI, flagged that changes to the rebate could spell the death of the cellar door because those not making their own wine, but selling under their own label, would not be eligible for the WET rebate from 1 July 2019.
In announcing the implementation paper, the Minister for Revenue and Financial Services Kelly O’Dwyer, and Assistant Minister for Agriculture and Water Resources, Senator Anne Ruston said: “The government is aware that some industry participants have called for eligibility for the rebate to focus on wine producers who own the grapes throughout the winemaking process and have investments in the industry such as ownership of a winery, vineyard or cellar door, and for the rebate to be removed from bulk and unbranded wine sooner.”
“The implementation paper sets out the government’s proposed approach to implement the tightened eligibility criteria, giving consideration to these issues, and invites views from industry.”
The Assistant Minister for Agriculture and Water Resources, Anne Ruston, said the wine industry had been the driver of changes to the WET rebate, and the rebate was creating incentives for business restructuring to take advantage of the rebate.
Submissions can be made until 7 October here.
In short
The paper is looking to Australia’s wine industry for comments on the WET Rebate reforms, with submitters to consider the following questions:
1. For rebatable wine, is the proposed definition of packaged and branded wine appropriate? If a trademark approach is used, what types of trademarks should be permitted (e.g. exclusively licensed trademarks) and what would the impact be?
2. For eligible producers, how should a winery ownership and leasing test be applied? What should be the nature and extent of investment in the wine industry required to access the rebate, and how can this be implemented?
3. What is the impact from a 1 July 2019 start date of the tightened eligibility criteria? How might this change from an earlier transition period?
