The Brewer's Guide to a Better Bottom Line: 3 Tax Incentives You're Missing

Tax Incentives for Breweries Australia

Craft brewing is a passion industry. It’s an alchemy of science, creativity, and hard work, all aimed at producing the perfect schooner. But as any brewery owner knows, passion doesn't pay the excise tax, and it's a tough, competitive business.

The good news is that the government has a few powerful incentives designed to help you thrive, innovate, and improve your bottom line. We're not just talking tasting notes; we're talking about a toolkit that can save you thousands and even put cash back into your business. Here's our breakdown of tax incentives for breweries Australia.

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Here are three key incentives every Australian craft brewer needs to know about.

1. The Simple Start: Small Business Income Tax Offset

This one is a simple but effective benefit for any brewer set up as a sole trader or in a partnership.

An offset isn't a deduction (which just lowers your income); it's a direct discount on your final tax bill.

• The Benefit: The offset is 16% of the tax payable on your business income.

• The Cap: It's capped at $1,000 per person, per year.

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For a small brewing partnership, that's a handy grand in your pocket, just for running your business.

2. The Big One: Excise Tax Producer Rebate

This is a straightforward, high-impact rebate that provides a massive cash flow boost and helps you compete with the big players.

Excise tax is the bane of every brewer, but under the current rules, eligible brewers can get a 100% rebate on the first $350,000 of excise duty they pay each financial year. For most small breweries, this is an enormous, direct, and reliable financial benefit.

3. The Game-Changer: The R&D Tax Incentive

When you hear "R&D," you probably picture a sterile lab, not a brewer in a flannel shirt experimenting with hops. This is the single biggest misconception that costs breweries money.

In the eyes of the government, R&D is simply conducting experiments where the outcome isn't known in advance. And breweries do this all the time.

What counts as R&D for a brewery?

It's not just following a recipe. It's the trial and error you go through to solve a technical problem or create something genuinely new.

Examples of eligible R&D activities include:

• Experimenting with a new, wild yeast strain to create a unique and stable flavour profile.

• Developing a new brewing process to create a truly gluten-free hazy IPA that doesn't compromise on taste or mouthfeel.

• Trialling a new canning technique that you hypothesise will reduce oxygen levels and improve the shelf life of your beer.

  
  

If you have a hypothesis, run multiple trials to test it, and aren't sure if it will work, you are likely conducting R&D.

The Benefit: A 43.5% Refundable Tax Offset

This is the best part. For small businesses with a turnover under $20 million (which includes most craft breweries), the R&D incentive is a refundable tax offset.

The rate is your company’s tax rate (25%) plus an 18.5% premium, adding up to a 43.5% tax offset on your eligible R&D spending.

What does "Refundable" mean?

It means that if your 43.5% offset is greater than the tax you have to pay for the year, the ATO will pay you the difference. In cash.

That's right. You could receive a cash injection from the ATO simply for your hard work in trying to create a new and better beer.

What costs can you claim?

You can claim a significant portion of the direct costs of your experiment, including:

• Salaries for your brewers (for the time they spend on R&D activities).

• Raw materials used in the trial batches (the malt, hops, and fancy yeast).

• The decline in value (depreciation) of equipment used for the R&D.

  
  

What's the Catch?

The catch is simple: paperwork. You must keep excellent records to prove you were conducting eligible R&D activities, and you must register those activities with AusIndustry each year before you can claim the offset in your company tax return.

We'll Handle the Paperwork, You Handle the Beer

Navigating these programs, especially the R&D Tax Incentive, requires expert guidance. You need to know what activities qualify, what records to keep, and how to lodge the claims correctly.

That's where we come in.

At Aevum Accounting, we love working with craft breweries. We help you identify those eligible R&D activities, ensure your record-keeping is rock-solid, and work alongside specialist R&D consultants to make sure your application is perfect.

Our goal is to ensure you get every dollar you're entitled to so you can keep innovating and brewing delicious beer.

Book a consultation with our team today

(https://www.aevumaccounting.com.au/bookings) and let's talk about improving your bottom line.

Disclaimer: The information and strategies shared in this article are for general informational purposes only and do not constitute specific tax or financial advice. Everyone's situation is unique, and tax laws are complex and constantly evolving. For personalized advice tailored to your specific individual or business needs, we always recommend consulting with a qualified professional at Aevum Accounting.