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EU Consults On Alcohol Excise Duty Reform

Wednesday, April 19, 2017

The European Commission has launched a consultation on possible options for changing the rules on the structures of excise duty applied to alcohol and alcoholic beverages.

Council Directive 1992/83/EC defines and classifies various types of alcoholic products, along with the products subject to excise duty. It details the methods by which the duty must be charged (i.e. how the duty is calculated), and provides exemptions from duty. In addition, it gives member states the discretion to provide reduced rates in certain circumstances.

An October 2016 report compiled by the European Commission concluded that there may be scope to improve the Directive and reduce the administrative burden for member states and economic operators, and reduce distortions in the internal market. In March 2017, the Commission published an Inception Impact Assessment, which outlines possible options for reform.

The assessment identified the following problems:

  • The product categories are incomplete, leading to tax incentives being exploited;
  • The Directive is not sufficiently clear about its objectives and differential impacts, including in the area of reduced rates for beverages below a certain alcoholic strength;
  • There are significant problems for administrators and economic operators in the application of the rules for exemptions for the different types of denatured alcohol; and
  • There is an additional economic burden for economic operators in some member states due to the inconsistent calculation of excise duties on beer.

The Commission will analyse the contributions received and produce a synopsis report of the consultation process. The final Impact Assessment report is due for publication in the final quarter of 2017.

The consultation closes on July 7.