Wine Equalisation Tax (WET)
- Julie Hanlon
About WET
If you make wine, import wine into Australia or sell it wholesale, you'll have to account for wine equalisation tax (WET). WET is designed to be paid on the last wholesale sale of wine, which is usually between the wholesaler and the distributor; or the wholesaler and the retailer. WET may also apply between a retailer and the consumer where there hasn't been a wholesale sale. For example, at a cellar door where wine is sold by the producer straight to the consumer. WET is also payable on imports of wine.
WET is a tax of 29% of the wholesale value of wine. It is generally only payable if you are registered or required to be registered for GST. Unless you are importing wine in which case it is payable irrespective of whether you are registered for GST.
WET is a tax that is calculated before the application of GST. Therefore GST is calculated on the Total Ex Price + WET Tax.
How Jiwa supports WET
Jiwa is able to denote which of your inventory items are applicable for WET. Jiwa is also able to denote which of your customers are to be charged WET. Jiwa records liquor licence details against a customer and will apply the applicable WET based on the validity of the licence and whether the customer, as another wholesaler, is exempt from WET.
When a quote or sale is created, Jiwa calculates the relevant WET on applicable items.
The journal set created when a sales order is processed is also updated to post any WET to the applicable clearing account.
WET Reporting
Business Activity Statement Worksheet 2 provides a listing of WET collected by invoice.
A modified Debtors Transactions report clearly shows the WET collected by invoice for a date range.
A modified Sales with Tax report clearly shows the WET collected by stock item, broken down by customer.
Retail WET
Jiwa's WET plugin also caters for Retail WET. In a scenario where WET is applicable on retail sales (eg, at a winery cellar door, through a wine club, or for own use), Jiwa calculates WET based on a notional wholesale price. The method of calculating notional wholesale price is 'half retail price'. Other methods can be applied if applicable.
If a company is applying Retail WET then Jiwa will only calculate this where the customer does not have a valid liquor licence.
How to get WET
If you're interested in our WET plugin, please contact Jiwa Financials for more information:
02 9409 0700