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Wine Equalisation Tax (WET) is a tax on wine levied at 29% of the taxable value of wine. The taxing point is the last wholesale sale, or a retail sale or application for own use (e.g. tastings) when there is no wholesale sale. The taxable value is the actual sale price (excluding WET and GST) for wholesale sales, or a notional equivalent value in the other situations.

WET affects wine manufacturers, wholesalers, and importers. Retailers do not have a WET liability unless they make their own wholesale wine. WET is paid as part of the entity's activity statement, the tax period is the same as the entity's tax period for GST (which may be monthly, quarterly or annually).

The Producer Rebate scheme entitles wine producers to a rebate of WET for up to $500,000 of domestic sales each financial year. There is a modified producer rebate scheme for New Zealand wine producers.

Generally, WET is included in the price that retailers such as bottle shops and restaurants pay when purchasing wine. The retailer is not entitled to claim back the cost of the WET, as the WET is built into the price the retailer pays and then passed on to the consumer.

WET applies to the following alcoholic beverages:

• Grape wine (including sparkling and fortified wine, marsala, vermouth, wine cocktails, and creams) 
• Other fruit wines and vegetable wines (including fortified fruit and vegetable wines) 
• Cider and perry 
• Mead (including fortified mead) and sake 

MORE: See the ATO web site for more information on Wine Equalisation Tax and for instructions on filling out the WET section of the Activity Statement. 

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Taxpayers who do not meet their tax obligations may face penalty or interest charges. To avoid these charges, ensure you pay the full amount of tax you owe by the due date. 

The main charges for failing to meet tax obligations are the: 

• General interest charge (GIC) - applies to a variety of situations, whenever amounts owing to the Australian Taxation Office (ATO) are paid after the due date.
• Shortfall interest charge (SIC) -  applies to a variety of situations where a tax liability is increased in an amended assessment
• Failure to lodge on time penalty (FTL) - administrative penalty which may be applied if a taxpayer fails to lodge a return, statement, notice, or another document with the ATO by the due date. 

Additional penalties include failing to:

• Keep or retain required records
• Retain or produce required declarations 
• Provide access and reasonable facilities to an authorised tax officer
• Apply for or cancel GST registration when required 
• Issue a required tax invoice or adjustment note
• Register as a PAYG withholder when required 
• Lodge a required activity statement electronically
• Pay a required amount electronically

If a taxpayer is audited and an amended assessment is raised, further penalties of up to 75% of the additional tax levied may be applied, depending on the severity of the offence. Examples include making a false or misleading statement, not taking reasonable care, or taking a position that is not reasonably arguable in a tax return or other document.