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 applicable.
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Different EU countries may impose other taxes on these products, as well.
Note: The EU rules on excise duties do not apply in the following regions of the EU:
- The Canary Islands
- The Channel Islands
- The Åland Islands
- The Island of Heligoland
- The territory of Büsingen
- Campione d'Italia
- The Italian waters of Lake Lugano.
In some cases excise duties paid are based on those from another country:
- Monaco businesses must pay French excise rates.
- San Marino businesses must pay Italian excise rates.
- United Kingdom Sovereign Base Areas of Akrotiri and Dhekelia must pay Cypriot excise rates.
- The Isle of Man must pay UK excise rates.
- 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).
Reduced rates and exemptions
EU rules set minimum rates of excise duty on alcohol/alcoholic drinks. View the full list of excise duty rates applicable in the EU on alcohol/alcoholic drinks .
There are some additional rules that may also be applied in certain countries:
- Small breweries (producing a maximum of 200,000 hl of beer per year) or distilleries (producing a maximum of 10 hl of pure alcohol per year) can receive a reduction of up to 50% off the standard duties.
- Small wine producers making 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 by volume or less .
Energy products & electricity
These are taxed when used as:
- motor fuel;
- fuel for heating.
Energy products used as raw materials or for the purposes of chemical reduction, or in electrolytic and metallurgical processes are out of the scope of the Directive, which means that the Member States may or may not decide to levy a tax on such use.
The main products that are taxed are:
- mineral oils;
- solid fuels: coal, coke, lignite;
- natural gas;
- alcohols, if they are intended for use as heating fuel or motor fuel;
- animal or vegetable oils, if they are intended for use as heating fuel or motor fuel.
Reduced rates and exemptions
Obligatory tax exemptions:
- Energy products and electricity used to produce electricity (but may be taxed for environmental reasons).
- Energy products supplied for use as fuel for the purpose of air navigation, except when used for private pleasure-flying.
- Energy products supplied for use as fuel for the purposes of navigation within Community waters, except when used for private pleasure craft.
Optional tax exemptions or reductions below the EU minimum tax levels:
- 'Green' Electricity.
- Electricity from highly efficient combined heat and power generation.
- Energy products used in combined heat and power production.
- Navigation in inland waterways.
- Electricity, natural gas, coal and solid fuels consumed by households.
- Energy Intensive business (certain rules need to be respected).
- Biofuels (certain rules need to be respected).
Optional tax differentiations above the EU minimum tax levels:
- Public transport.
- Commercial use of gas oil (big trucks).
- Differentiation according to quality and quantity of the energy product, (e.g. the sulfur content of the fuel).
EU rules set minimum rates of excise duty on energy products. View the full list of excise duty rates applicable in the EU on energy products .
The excise duties for manufactured tobacco defines the following excisable categories:on
- Smoking tobacco (such as fine cut rolling tobacco).
The EU legislation lays down the principles of taxation and sets the minimum rates to be applied.
View the full list of excise duty rates applicable in the EU on tobacco products .
Excise goods are generally exempt 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.
Selling to another business
When are excise duties payable?
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 Excise goods become subject to excise duty as soon as they are produced, or imported into the EU.
But this duty can in effect be suspended and does not have to be paid until the product is "released for consumption". This means the moment when products are no longer under duty suspension arrangements. Note that to be able to produce store and move excise goods without paying excise (under excise duty suspension) 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?
Excise duty is paid by:
- the person or business who is the "authorised warehouse-keeper" of the place where excise products are produced, processed, stored, dispatched or received;
- 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 the duty-suspension arrangement.
Transporting goods to different EU countries without paying duties
To enable you — as a seller — to transport goods, but maintain the suspension of excise duty (the duty will be paid by the buyer in the country of destination according to that country's rates) you must adhere to the following rules.
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 consignor), 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 for movements of energy products within the EU under the condition that the movement takes place by sea or by fixed pipeline, and if there is an agreement between the Member States concerned.
Rule 2 - Electronic administrative document (e-AD)
As well as the guarantee, you must also send an electronic administrative document (e-AD) to the responsible excise authority in your country using the Excise movement & control system (EMCS) .
- forwards the e-AD to its counterpart authority in the buyer's EU country (who forwards it to the buyer).
Before transport begins, you must print out the e-AD with its administrative 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;
- you notify the responsible authority in the country of dispatch about this. Some countries insist on the trader being given permission before being allowed to leave.
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 report of receipt 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 report of receipt — it is only for this confirmed quantity on which you do not have to pay the duty.
If any products were lost or damaged during transport — and this is confirmed by the authorities in the country where the loss or damage occurred or was detected — you can change the received and confirmed quantity on the documentation accordingly.
Check a business partner's excise number
If you want to find out whether a business partner's excise authorisation 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.
There are no limits on what private persons can buy and take with them when they travel between EU countries, as long as the products purchased are for personal use and not for resale, with exception of new means of transport. Taxes (VAT and excise ) will be included in the price of the products in the Member State of purchase and no further payment of taxes can be due in any other Member State.
Tobacco and alcohol
However, special rules apply in the case of goods subject to excise duty, such as alcoholic beverages and tobacco products. If a private person purchases such products in one Member State and takes them to another Member State, the principle that no excise duty has to be paid in the Member State of destination only applies if the goods are:
- for the own use of the traveller; and
- transported by himself.
To determine whether these products are for the own use of the traveller, Member States must take account of all the relevant factors. One of the factors is the quantity of goods. Member States may set guide levels to indicate up to which quantity goods are generally considered as for the own use of the traveller. The guide levels should be at least:
a) Tobacco products
- cigarettes 800 items
- cigarillos (cigars weighing not more than 3 g each) 400 items
- cigars 200 items
- smoking tobacco 1.0 kg
b) Alcoholic beverages
- spirit drinks 10 litres
- intermediate products 20 litres
- wines (including a maximum of 60 litres of sparkling wines) 90 litres
- beers 110 litres
As regards tobacco products, EU countries may limit the number of cigarettes you can bring with you from certain other EU countries which do not yet charge the minimum level of excise duty. This limit cannot be lower than 300 cigarettes.
As it stands now, Austria, Croatia, Denmark, Germany, Ireland, Italy, Slovenia and Sweden apply this lower limit for travellers coming from Bulgaria, Croatia, Hungary, Latvia, Lithuania or Romania.
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 most EU countries the appointment of a tax representative is obligatory; one of their roles is to pay excise duty on your behalf, if that country's responsible authority approves this action.
Before shipping you must:
- inform the destination-country responsible authority of the delivery;
- provide a guarantee that the excise duties will be paid.
Getting duty reimbursed
If you have already paid excise duties in your own country on the goods you sold (to avoid paying twice), you can get this amount reimbursed. To do so, you must:
- inform your own authority of the shipment, (as well as the destination country);
- provide them with evidence that you paid duty on the goods in the destination country.
Online selling of tobacco products in some EU countries may require the seller to:
- use the destination country's tax stamps or other fiscal markings to show that the excise duty was paid there;
- provide health warnings in the language(s) of the destination country;
- register in the Member State where the seller is established and in the Member State of the consumer.
Member States may prohibit cross-border distance sales of tobacco products to consumers based on Article 18 of EU directive 2014/40/EU .