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).
- Connect Xero and DEAR. See Xero Integration - Basic (necessary)
- Familiarity with Product Management, Processing a Sale (necessary)
To account for WET in Xero and DEAR:
- Create a liability account using Xero where you will map WET directly.
- Refresh your chart of accounts in DEAR. The newly created account in Xero will now be available in DEAR.
- Create a service item for WET (see Products for information on creating products/services).
- 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 account in your COA.
In the example below the WET amount will total to $217.50 (this was worked out by multiplying the total product line items before tax by 29%). GST is then applied to the total.
- Once authorised, the invoice will sync with Xero the next time synchronisation is triggered. This is what the synced invoice looks like in Xero.
- This is how the above transactions affect the General Ledger Report in Xero.
- Under Financial Settings in Xero (go to Accounting → Advanced → 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.