BAS agent toolkit – WET and WEG

What is it?
Wine Equalisation Tax (WET) of 29% must be applied to all wholesale sales of wine in Australia, usually on the final sale. Typical examples include a restaurant or liquor store buying wine from a winery or distributor.

Who has to pay it?
Retailers who buy the wine from wholesalers will pay the WET amount unless a valid ABN quotation is provided at or before the time of sale. The WET does not apply until the final sale of the wine to a retailer; e.g. a winery selling to a distributor would not apply WET. When the distributor on sells the wine to the restaurant it would have WET applied.

How to calculate WET or wholesaling.

1) 29% of WET is applied to the selling price of the wine. (ex GST)

2) GST is then calculated on the total selling price including WET.

Note – If the selling price includes WET the seller must show the breakdown of GST and WET on the invoice.

(Image source: www.ato.gov.au)

Registering for WET.
Wholesalers or producers of wine must register with the ATO for WET. Once this is done the option to report on WET payable and WET credits will appear on the BAS. Note: this is not necessary for wine retailers.

What is WEG?
WEG is the tax code label for a price including GST & Wine Equalisation Tax. If the supplier issues a valid tax invoice with a detailed break-down of the GST and WET component then the buyer can claim the input tax credit.

ATO Links
https://www.ato.gov.au/Business/Wine-equalisation-tax/