Accounting for Wine Equalisation Tax


If you make wine, import wine into Australia or sell it by wholesale, you'll generally have to account for wine equalisation tax (WET).


WET is a tax of 29% of the wholesale value of wine. It is only payable if you are registered or required to be registered for GST.


It's designed to be paid on the last wholesale sale of wine, which is usually between the wholesaler and retailer. But it may apply in other circumstances – such as cellar door sales or tastings – where there hasn't been a wholesale sale. WET is also payable on imports of wine (whether or not you are registered for GST).


Prerequisites


To account for WET in Zero and DEAR:

  1. Create a liability account using Xero where you will map WET directly.

 



  1. Refresh your chart of accounts in DEAR. The new created account in Xero will now be available in DEAR.



  1. Create a service item for WET (See Products for information on creating products/services). 
  2. In the additional costs section of a sale invoice, include the WET service item Make sure you select the WET account that was created in Xero under the account column to ensure the WET is mapped to the correct COA.

    In the example below the WET amount will total to $153.12 (This was worked out by multiplying the total product line items by 29%).

 


  1. You are now ready to sync this invoice with Xero.



  1. This is how the above transactions affect the General Ledger Report in Xero.




  1. Under Settings in Xero (Click General settings > Financial Settings) you will need to check the Wine Equalisation Tax box. An additional tax section will appear in your Business Activity Statements.

    Please note that the WET amount will need to be manually entered into the BAS.