If your company produces or trades excise goods (alcohol, alcoholic drinks, energy products, electricity, tobacco products), you must be aware of the rules on payment of excise duties on them.
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Different EU countries may impose other taxes on these products, as well.
The EU rules on excise duties do not apply in the following regions of the EU:
- Canary Islands
- Channel Islands
- Åland Islands
- Ceuta and Melilla
- Italian waters of Lake Lugano.
Monaco businesses must pay French excise rates.
San Marino businesses must pay Italian rates.
Excise duty - which products?
- beer or mixtures of beer with non‑alcoholic drinks
- other fermented drinks such as cider
- intermediate products such as sherry or port
- ethyl alcohol - except when it used to manufacture other products not intended for human consumption (if used for heating or propulsion it may be classified as an energy product)
EU rules set minimum rates of excise duties [1 MB] , but in certain countries small breweries (producing maximum 200,000 hl of beer per year) and distilleries (maximum 10 hl of pure alcohol per year) can receive a reduction of up to 50% off of the standard duties. Small wine producers (less than 1,000 hl per year) can also receive reductions or exemptions.
Excise duty does not need to be paid on homemade products not produced for commercial purposes, except for spirits.
Reduced rates of excise duty may apply to wine and fermented drinks of 8.5% alcohol or less by volume.
These are taxed when used as:
- motor fuel
- heating fuel.
There is no excise duty on energy products when they are used for purposes other than as motor or heating fuel.
EU rules set minimum rates of excise duty on energy products [2 MB] .
Tobacco products (EU directive 2010/12/EU )
- smoking tobacco, such as fine‑cut rolling tobacco.
EU rules set minimum rates of excise duty on tobacco products [852 KB] .
Excise goods are generally exempted from the duty when they are used:
- in diplomatic or consular relations
- by the armed forces of any NATO member
- by international organisations.
When excise products are shipped for these purposes, they must be accompanied by an exemption certificate.
EU countries can also exempt excise goods from excise duty when they are sold:
- in tax-free shops and are carried in the traveller's personal luggage to a non‑EU country or to an EU territory not subject to the EU‑wide excise rules.
- on board an airplane or ship during a flight or sea‑crossing to or from a non‑EU country or to or from an EU territory not subject to the EU‑wide excise rules.
Who has to pay and when
Sales directly to final consumers
Sales to other businesses
There is an important difference between the time a product becomes subject to excise duty and the time this duty has to be paid.
Most products become subject to excise duty as soon as they are produced, extracted or imported into the EU.
But this duty is in effect suspended and does not have to be paid until the product is "released for consumption". This means the moment it is received by another business (a "consignee") having left its authorised storage or production place. Note that to be able to produce and store excise goods without paying excise requires a special authorisation from the country in question.
If excise products are destroyed or lost due to unforeseeable reasons or natural disasters before they are released for consumption, no excise duties have to be paid.
Who pays excise duty?
- the person or business who is the "authorised warehouse-keeper" of the place where excise products are produced, processed, stored, dispatched or received or
- any other person - sender, recipient, transporter, 3rd party providing a movement guarantee, etc. - who caused the goods to leave the duty-suspension arrangement
- the person declaring the import, if the goods are imported and not immediately put under duty suspension.
Transporting goods to different EU countries without paying duties
There are 3 basic special rules that enable you, as a seller, to transport goods but maintain the suspension of excise duty and so avoid paying it yourself.
Instead the duty will be payable by the buyer in the country of destination according to that country's rates.
Rule 1 - Guarantee against transport risks
The EU country from which the goods are dispatched requires them to be covered by a guarantee covering transport risks that is valid throughout the EU.
This guarantee can also be provided by you as the seller (warehouse-keeper or registered sender), or by the transporter or buyer - or by two or more of them/you.
The EU country of dispatch can waive this requirement if the goods are transported solely within its borders.
Similarly, no guarantee is needed if both the EU dispatch country and the EU destination country agree to this.
Rule 2 - Electronic administrative document (e-AD)
- checks the validity of the data in the e-AD (e.g. registration number of seller and buyer) and gives you its reference code
- forwards the e-AD to its counterpart authority in the buyer's EU country (which forwards it to the buyer).
Before transport begins, you must print out the e-AD with its reference code and give it to the transport company.
At any time before transport begins, you can cancel the e-AD. During transport, you can also change the destination using the EMCS system.
If the EMCS system is not available, you can still transport the goods without paying excise duty if:
- they are accompanied by a paper document containing the same data as the e-AD
Rule 3 - receiving the goods
The buyer has 5 working days to confirm receipt of the goods in the EMCS system. Then:
- the responsible authority in the EU destination country checks the validity of the confirmation
- it registers a receipt report and forwards this to its counterpart authority in the country of dispatch - which forwards it to you, the seller.
After you receive this report, you can ask for your guarantee to be released.
If you follow these 3 rules, you will not - as the seller - have to pay excise duty on the goods transported.
Pay careful attention to the quantity indicated in the receipt report - it is only this confirmed quantity on which you do not have to pay the duty.
If any products were lost or damaged during transport, you can add these to the received and confirmed quantity.
Check business partner's excise number
If you want to find out whether a business partner's excise number is valid or not, you can use the SEED excise authorisation system.
If your partner has a valid number, SEED will show you a list of products they are authorised to trade.
Selling to private customers
If you sell excise goods directly to private customers and the place of sale is your country, you'll have to charge excise duties according to the rates valid in your country.
If customers carry the goods purchased tax-paid in one EU country into another EU country, then no excise duties will be charged, up to at least the following maximum amounts:
- cigarettes - 800
- cigars - 200
- cigarillos - 400
- smoking tobacco - 1 kg
- spirit drinks - 10 litres
- wine - 90 litres (including max. 60 litres of sparkling wine)
- beer - 110 litres
In some EU countries these amounts may be higher.
If the customer buys more than the amounts mentioned above, you should tell them they may need to provide evidence that the goods are for their own consumption.
Online & remote selling
If you sell excise goods to your private customers on the internet, you must pay the excise duty and rates of the country where the customers live.
In some EU countries, you can have your tax representative there pay on your behalf - if this has been approved by that country's responsible authority.
Before shipping you must:
- inform the destination-country authority of the delivery
- guarantee to them that the excise duty will be paid.
Getting duty reimbursed
If you have already paid excise duties in your own country on the goods you sold, you can get this amount reimbursed, to avoid paying twice. To do so, you must:
- provide them with evidence that you paid duty on the goods in the destination country.
For tobacco products, online selling is limited in some EU countries by requirements to:
- use the destination country's tax stamps or other fiscal markings to show that you paid the excise duty there.
- provide health warnings in the language(s) of the destination country.