an said assessments of more than $35m had been issued against 27 entities for spurious WET rebate claims since January 2012, with several further audits in progress, The Australian reports.“In addition, the ATO is currently undertaking criminal investigations in relation to two matters,” the spokesman said.
The WET is a 29 per cent tax on wholesale wine, but wineries can claim back a rebate of up to $500,000.
The WET generated $725 million in revenue for the government in 2012-13, but $291 million of this was refunded in the form of rebates.
Mathew Brittingham, senior associate with Adelaide wine industry accountants Finlaysons, said most cases of erroneous WET rebates were honest mistakes but several winemakers had set up shelf companies to which they would sell their wine in sham transactions to claim additional rebates.
“Essentially one parcel of wine will pass through a number of entities that do nothing more than a little blending so they can be classed as a producer and then claim a rebate, but because WET is only charged on the final wholesale sale, every one of the intermediate sales gives rise to a rebate without having to pay the tax,” he said. “We’ve seen as many as 12 in the chain, so you get 11 rebates and only one lot of tax being claimed, and the tax office really doesn’t like that.”
“The industry is very much on notice with regard to those sort of schemes, so I think they will become a thing of the past,” he said.
The Winemakers Federation of Australia is pushing for reform of the WET program as part of the government’s larger tax system review, to prevent rorting and to stop New Zealand producers from accessing the rebate program, which delivered $23m to Kiwi producers in 2012-13.
Wolf Blass announced last month he will be funding a study on the legality of axing the rebate for New Zealand wineries, without adversely affecting local winemakers.
Blass said that money would be better spent on marketing the huge stockpile of Australian wine.
ATO records show that another 30 foreign companies are registered for WET, of which 16 made refund claims totalling $476,105 in the 2012-13 year.
