1Wine Equalisation Tax New Zealand Producer Rebate Foreign Exchange Conversion Determination (No. 57) 2016

Legislative Instrument

Wine Equalisation Tax New Zealand Producer Rebate Foreign Exchange Conversion Determination (No. 57) 2016

I, Timothy Dyce, Deputy Commissioner of Taxation, make this determination under subsection 17-10(2B) of the A New Tax System (Wine Equalisation Tax) Act 1999

Dated this 1 August 2016

Timothy Dyce

Deputy Commissioner of Taxation

1. Name of instrument

This determination may be cited as the Wine Equalisation Tax New Zealand Producer Rebate Foreign Exchange Conversion Determination (No. 57) 2016

2. Commencement

This instrument is taken to have commenced on the day after it is registered.

3. Repeal of previous instrument

The following determination is repealed on the commencement of this determination:

Wine Equalisation Tax New Zealand Producer Rebate Foreign Exchange Conversion Determination (No.35) 2016 (the previous instrument)

-F2016L00197, registered on 1 March 2016

4. Application

This instrument applies to approved New Zealand participants that are required to calculate the approved selling price of their wine in Australian currency, when one or more components of the approved selling price are expressed in a currency other than Australian currency.

Note: For approved New Zealand participants, the amount of a Wine Equalisation Tax producer rebate is calculated using the approved selling price of their wine.

5. Definitions

   (1) In this determination:

   RBA rate means the foreign exchange rate calculated by the Reserve Bank of Australia (RBA) when the New Zealand participant works out the value of the component used to determine the approved selling price on a conversion day:

   (a) that is an RBA business day, then the RBA rate is the unit of foreign currency per $A calculated by the RBA at 4:00pm Australian Eastern time on that RBA business day, and (b) that is not an RBA business day, then the RBA rate is the unit of foreign currency per $A calculated by the RBA at 4:00pm Australian Eastern time of the previous RBA business day.

   New Zealand participant’s agreed rate means a foreign exchange rate agreed to between the New Zealand participant and the recipient of the wine. The agreed rate only applies for sales made under the agreement and for the period of the agreement applying to the Australian financial year in which the producer rebate is being claimed.

   conversion day is the date you use to convert foreign currency into Australian currency for wine equalisation tax purposes, and is the earlier of:

   (a) the day on which any of the consideration is received by the New Zealand participant for the supply of the wine (the receipt date); or (b) the invoice date.

   RBA business day means a day that the head office of the RBA is open for business

   Reserve Bank of Australia means the body corporate continued in existence under the Reserve Bank Act 1959.

   (2) Other terms in this determination have the same meaning as in the A New Tax System (Wine Equalisation Tax) Act 1999.

6. Manner in which the conversion to Australian currency may be made

Option 1 – conversion for components expressed in any foreign currency

In working out the value of the component used to determine the approved selling price, you convert the value of the component expressed in a foreign currency (including New Zealand currency) on a conversion day in accordance with the following formula:

<table cellspacing="0" cellpadding="0" style="width:408.85pt; margin-left:30.6pt; border-collapse:collapse"><tbody><tr style="height:34.15pt"><td style="width:171.25pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p style="margin-bottom:6pt; font-size:11pt"><span style="font-family:Arial, sans-serif"></span></p></td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p style="margin-bottom:6pt; font-size:11pt"><span style="font-family:Arial, sans-serif"></span></p></td><td style="width:173.5pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"><p style="margin-bottom:6pt; font-size:11pt"><span style="font-family:Arial, sans-serif"></span></p></td></tr><tr style="height:19.85pt"><td rowspan="2" style="width:171.25pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:middle"><p style="text-align:center; font-size:9pt"><span style="font-family:Arial, sans-serif">Value of </span><span style="font-family:Arial, sans-serif">the </span><span style="font-family:Arial, sans-serif">component expressed</span></p><p style="text-align:center; font-size:9pt"><span style="font-family:Arial, sans-serif">in a foreign currency</span></p></td><td rowspan="2" style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:middle"><p style="text-align:center; font-size:9pt"><span style="font-family:Arial, sans-serif">X</span></p></td><td style="width:173.5pt; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"><p style="text-align:center; font-size:9pt"><span style="font-family:Arial, sans-serif">1</span></p></td></tr><tr style="height:16.5pt"><td style="width:173.5pt; border-top:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p style="margin-bottom:6pt; text-align:center; font-size:9pt"><span style="font-family:Arial, sans-serif">The </span><span style="font-family:Arial, sans-serif; font-weight:bold">New Zealand participant’s particular exchange rate</span><span style="font-family:Arial, sans-serif"> on the </span><span style="font-family:Arial, sans-serif; font-weight:bold">conversion day</span></p></td></tr><tr><td style="width:171.25pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p style="margin-bottom:6pt; font-size:11pt"><span style="font-family:Arial, sans-serif"></span></p></td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p style="margin-bottom:6pt; font-size:11pt"><span style="font-family:Arial, sans-serif"></span></p></td><td style="width:173.5pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:top"><p style="margin-bottom:6pt; font-size:11pt"><span style="font-family:Arial, sans-serif"></span></p></td></tr></tbody></table>

where,

the New Zealand participant’s particular exchange rate is the RBA rate or the New Zealand participant’s agreed rate, whichever is applicable; and
the conversion day is the date that the foreign currency is converted into Australian currency for wine equalisation tax purposes.

Option 2 – additional option for components expressed in New Zealand currency

Where the value of the component used to determine the approved selling price is expressed in New Zealand currency, then in working out the value of that component you have the option of converting the value on a conversion day in accordance with the following formula:

where,

average yearly RBNZ rate is as published on the Australian Taxation Office (ATO) website – ato.gov.au; and
the conversion day is the date that the New Zealand currency is converted into Australian currency for wine equalisation tax purposes.

You must use your particular exchange rate and conversion option consistently.