Excise duty: provisional agreement on modernised taxation rules for alcohol

25 Jun 2020 12:29 PM

The EU is modernising the way alcohol products are taxed to reduce existing distortions in the single market.

Member states' ambassadors to the EU yesterday provisionally endorsed, subject to further confirmation by the Council, to update excise duty rules on alcohol within the EU. Essentially, the updated rules on structures of excise duty are in particular expected to improve the business environment and reduce costs for small alcohol producers, while taking into account considerations related to health and efficient tax collection.

Zdravko Maric, Deputy Prime Minister and Minister of finance of Croatia yesterday said:

Our common EU framework on how to tax alcohol is crucial to ensure that we all play by the same rules. However, over the past 30 years, the way we produce and consume alcohol has considerably evolved. Today, we are updating our rules to better reflect the latest developments in the alcohol industry.

Excise duties are indirect taxes on the sale or use of specific products, such as alcohol, tobacco and energy. The revenue from these taxes goes entirely to the country to which they are paid. Since 1992, EU countries have had in place common rules, in particular minimum excise duty rates, to make sure that excise duties are applied in the same way and to the same products everywhere in the EU.

The reform includes the following changes:

The new rules will be formally adopted by the Council after the legal and linguistic finalisation of the Directive and national legislation transposing this Directive will apply from 1 January 2022.

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