ATO assistance for bushfire affected businesses

Wine Equalisation Tax and Rebate

The ATO understands a number of businesses are impacted by the recent bushfires, and have recently received some questions regarding the Wine Equalisation Tax (WET) producer rebate from impacted businesses.

Due to the bushfires affecting the wine and cider industry, producers of wine and cider may need to seek alternative suppliers of their source products.  If your business is impacted, please remember you need to own the source product to be eligible to claim the WET producer rebate.

WET producer rebate eligibility criteria

To be able to claim the WET producer rebate, a business must:

• be the producer of the wine
• be liable to pay WET, or sell the wine under quote to a purchaser who declared in the quote that they will be liable for WET on a subsequent dealing in the wine
• sell the wine in a container with a capacity of five litres or less (51 litres for cider and perry) that is suitable for retail sale and branded by a trade mark owned by them (or an associated entity)
• own the source product (for example, whole unprocessed grapes, apples, pears, other fruit or vegetables, honey, and rice) that makes up at least 85% of the total volume of the wine throughout the winemaking process.

There is no entitlement to the producer rebate where a business did not own the source product that makes up at least 85% of the total volume of the wine throughout the winemaking process.

The source product can either originate from vineyards and orchards owned by the business, or be purchased prior to the commencement of the winemaking process.

The business is required to maintain continuous ownership of at least 85% of the source product from immediately prior to crushing (or immediately prior to the initial fermentation for mead and sake) until the wine is placed in a container that meets the packaging and branding requirements.

Where source product is supplied under a supply agreement, ownership of the source product will pass when the parties to the agreement intend and agree for ownership to pass.

What is NOT source product
Purchased bulk wine or juice would not be regarded as source product, or deemed source product (additives and ingredients that are used in small quantities in traditional winemaking processes), and could only form part of the remaining 15% of the volume of the wine.

You can read more about the WET Producer rebate

ATO Assistance for bushfire impacted businesses

If you have been impacted by the bushfires, the ATO understands your priority is on your family and community. They have implemented a range of measures to help you during this time. If you live or work in one of the identified impacted post codes the ATO will automatically defer any lodgements or payments you have due until 28 May 2020.

Payment and lodgement deferrals for people in bushfire impacted postcodes don’t apply to large withholders (that is, those who have previously withheld more than $1 million tax annually or are part of a corporate group that has).

The ATO will also provide assistance in other ways, including fast tracking any refunds owed, remitting penalties or interest charged during the times you have been impacted by the fires, and helping businesses re-construct tax records lost or damaged.

More information on ATO assistance is available or you can call on 1800 806 218.

Federal Government Assistance for bushfire impacted businesses

The Australian Government also has a comprehensive suite of measures to help small businesses, who have suffered direct fire damage, or have been indirectly economically impacted following the bushfires, get back on their feet, including:

• Recovery grants of up to $50,000 (tax free) for eligible small businesses and non-profit organisations under the Disaster Recovery Funding Arrangements – to build on the recovery grants put in place by state governments;
• Concessional loans of up to $500,000 for eligible small businesses (including farmers, fishers and foresters) and non-profit organisations who have suffered significant asset loss of significant loss to revenue. The loan would be for up to 10 years and used for the purposes of restoring or replacing damaged assets and for working capital. The loans will be provided under the Disaster Recovery Funding Arrangements
• A Small Business Financial Support Line staffed by specialist financial counsellors who will provide information on the assistance and support available to small businesses in bushfire affected regions
  • while the specialist Support Line is being established, businesses can visit the Bushfire support page on the Australian Government Business website or call 1800 413 828,
• Local Economic Recovery Plans that will be locally developed and locally-led and will ensure the focus in each community is on the infrastructure and assets they need to rebuild.

More information on small business assistance is available.