The Australian Government has introduced legislation to improve the integrity of the wine equalisation tax rebate and better target support to small wine producers in rural and regional Australia.
The Treasury Laws Amendment (2017 Measures No. 4) Bill 2017 will tighten eligibility for the rebate. From 1 July 2018, wine producers will be required to own at least 85 per cent of the grapes used to make the wine throughout the winemaking process.
This will stop the rebate being claimed multiple times on the same wine through the production chain where it is subject to blending or further manufacture and then on sold.
Transitional arrangements will apply to provide the industry with sufficient time to adjust to the changes.
Wine will need to be packaged in a container not exceeding five litres (or 51 litres for cider and perry, i.e. pear cider) and branded with a trademark to remove eligibility from bulk and unbranded wine.
Rebate claims will be better linked to the payment of the wine equalisation tax to prevent schemes where the rebate is being claimed on wine sold into the export market.
The rebate cap will also be reduced from $500,000 to $350,000 from 1 July 2018.
“The Government has worked closely with the wine industry on the implementation details of these reforms to ensure the rebate is targeted to wine producers who build brands, invest in regional communities and create local jobs,” Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer MP said.
“The changes are a part of the continuing efforts of the Government to strengthen the integrity of Australia’s tax system.”
“The reforms to the rebate form an important part of the Government’s efforts to support a strong and sustainable Australian wine industry,” Assistant Minister for Agriculture and Water Resources, Senator the Hon Anne Ruston said.
“These positive reforms reflect the strong collaboration between Government and industry in working through the issues and identifying the solutions. I commend the leadership of the Australian wine industry on their advocacy, and willingness to debate and negotiate in good faith with the Government.”
The Government is also providing $50 million over four years to the Australian Grape and Wine Authority to promote Australian wine overseas, and introducing a new Wine Tourism and Cellar Door grant program that will provide wine producers who have exceeded the rebate cap up to an additional $100,000 per financial year on their cellar door sales.
Separately, this Bill includes a measure to provide tax roll-over relief to superannuation funds transitioning to the MySuper rules. This measure defers taxation consequences, ensuring that members are not disadvantaged by tax liabilities when superannuation funds transfer the member’s account balance to a low-cost MySuper compliant product within the same superannuation fund.