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Cigarettes: approximation of rates

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This Directive establishes an overall minimum excise duty for cigarettes as part of the internal market of the European Union (EU). EU countries are granted some flexibility to adjust the incidence of the overall minimum excise duty in line with certain changes, including those in VAT rates.

ACT

Council Directive 92/79/EEC of 19 October 1992 on the approximation of taxes on cigarettes [See amending act(s)].

SUMMARY

The Directive lays down minimum consumption taxes on cigarettes, as defined by Directive 72/464/EEC, i.e.:

  • a specific excise duty per unit of product;
  • a proportional excise duty calculated on the basis of the weighted average retail selling price (WAP);
  • VAT proportional to the retail selling price.

Each European Union (EU) country has to apply an overall minimum excise duty of 57% of the weighted average retail selling price of cigarettes released for consumption. That excise duty shall not be less than EUR 64 per 1000 cigarettes irrespective of the weighted average retail selling price. However, EU countries which levy an excise duty of at least EUR 101 per 1000 cigarettes on the basis of the weighted average retail selling price need not comply with the 57 % requirement.

From 1 January 2014, the overall excise duty on cigarettes shall represent at least 60 % of the weighted average retail selling price of cigarettes released for consumption. That excise duty shall not be less than EUR 90 per 1000 cigarettes irrespective of the weighted average retail selling price. However, Member States which levy an excise duty of at least EUR 115 per 1000 cigarettes on the basis of the weighted average retail selling price need not comply with the 60 % requirement.

Bulgaria, Estonia, Greece, Latvia, Lithuania, Hungary, Poland and Romania are allowed a transitional period until 31 December 2017 in order to reach the required amount of excise duties. There are also derogations for Portugal (relating to the Azores and Madeira) and France (relating to Corsica).

When an EU country increases the VAT rate on cigarettes, it may lower the overall excise duty up to an amount equal to the VAT rate increase (when both are expressed as a percentage of the weighted average retail selling price) even if this in effect reduces the overall excise duty to below the required levels. If this is the case, EU countries are required to increase the duty again in the following year to reach the required level.

There is a procedure for the regular examination of the rates or amounts laid down in the Directive on the basis of a report from the Commission to the Council.

REFERENCES

ActEntry into forceDeadline for transposition in the Member StatesOfficial Journal
Directive 92/79/EEC

10.11.1992

31.12.1992

OJ L 316 of 31.10.1992

Amending act(s)Entry into forceDeadline for transposition in the Member StatesOfficial Journal
Directive 1999/81/EC

11.8.1999

01.01.1999

OJ L 211 of 11.8.1999

Directive 2002/10/EC

8.3.2002

01.07.2002
GER: 01.01.2008
SP/GR: 01.01.2008

OJ L 46 of 16.2.2002

Directive 2003/117/EC

20.12.2003

31.12.2003

OJ L 233 of 20.12.2003

Directive 2010/12/EU

27.2.2010

1.1.2011

OJ L 50 of 27.2.2010

RELATED ACTS

Council Directive 92/80/EECof 19 October 1992 on the approximation of taxes on manufactured tobacco other than cigarettes [Official Journal L 316 of 31.10.1992].

Council Directive 95/59/EC of 27 November 1995 on taxes other than turnover taxes which affect the consumption of manufactured tobacco [Official Journal L 291 of 6.12.1995].

Last updated: 09.07.2010

See also

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