Policy & Issues

Selling Wine in the Domestic Market

In response to environmental changes, many businesses within the wine industry are transitioning from exporting wine to selling wine for consumption within Australia. This means they now have new obligations relating to the Wine Equalisation Tax (WET).  If you’re now selling to the domestic market, here’s what you need to know.

What is WET?

WET is a value-based tax which generally applies to the last wholesale sale of wine in Australia. If an entity makes or imports wine for consumption in Australia, or sells wine via wholesale, they will normally have to pay WET.

Registering for WET

You need to register for WET if you:

  • are a wholesaler, or producer of wine
  • are registered, or required to be registered for GST, and
  • have assessable dealings with wine

Your business activity statement (BAS) will then have labels for you to report WET payable and any WET credits for each tax period.

When is WET payable?

WET is generally payable by wine producers, wholesalers and importers, rather than retailers (except in certain circumstances). 

Transactions that attract WET are called assessable dealings and include:

  • Wholesale sales
  • Importations
  • Some retail sales and applications to own use (for example wine used in tastings)

WET liabilities are reported at label 1C on the BAS.

How is WET calculated?

Wholesale sales

Wholesale sales are sales made for the purposes of resale – for example a sale by a wine producer to a distributor or retailer.

For wholesale sales, WET is calculated on assessable dealings at 29% of the price for which the wine was sold (less the GST).

Depending on the sale, the price may include things such as freight costs, and may be decreased by discounts or rebates.

It is important that the correct price is used when calculating WET.

Retail sales and own use

Although WET is designed to apply to the last wholesale sale, there will be times when no wholesale sale occurs. WET is still required to be paid on the wine – this most commonly occurs where a retail sale is made by the producer of the wine.  In addition, there are some instances where an entity will be required to pay WET on wine applied to their own use if it has not already been subject to WET.  This is most commonly where a wine producer consumes wine themselves or gives wine away (for example wine used for tastings or promotional purposes).

In these circumstances a ‘notional wholesale price’ is used to calculate the WET.  There are two ways to calculate the notional wholesale price:

Exempt supplies

Some wine supplies may be exempt from WET.  For example:

  • where the purchaser intends to make a further wholesale sale of wine, they can defer paying WET by quoting their Australian Business Number (ABN) when the wine is purchased
  • if a dealing is GST-free, for example the wine is being exported, there will generally not be a WET liability

Credits for WET

In very limited circumstances, an entity may be entitled to claim a WET credit.  These include where:

  • an entity has a liability to pay WET on wine that has already had WET paid on it
  • an amount of WET has been overpaid
  • bad debts are written off that included WET that had previously been paid
  • an entity is entitled to claim the producer rebate

An entity is not entitled to claim a credit for WET where wine is purchased for a price that includes WET and is subsequently exported.

WET credits are reported at label 1D on the BAS.

Producer rebate

The producer rebate scheme entitles wine producers to a rebate of 29% of the wholesale value (or equivalent) of eligible domestic sales, up to a maximum of $350,000 per financial year.

To be eligible for the rebate an entity must:

  • be the producer of the wine
  • be liable to pay WET, or sell the wine under quote to a purchaser who will have WET liability on their subsequent dealing with the wine
  • own the source product (for example, whole unprocessed grapes) that makes up at least 85% of the total volume of the wine throughout the wine making process
  • sell the wine in a container with a capacity of five litres of less (51 litres for cider and perry) that is suitable for retail sale and branded by a trademark owned by the producer


The ATO has produced a webinar which explains these concepts in more detail – watch WET Back to Basics

Further assistance

If you need any further help or advice regarding the Wine Equalisation Tax, please contact the ATO at wettechadvice@ato.gov.au

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