Introduction

Certain rules regarding the excise duty rates and structures applied to alcohol and alcoholic beverages were established in order to ensure a common approach among the Member States in the run up to the completion of the Internal Market on 1 January 1993.

The rates and structures of the excise duty system applicable to alcohol and alcoholic beverages is set down in Community legislation.

Beer, wine, cider and spirits

Council Directive 92/83/EEC, which deals with the structures of excise duties on alcohol and alcoholic beverages, defines the categories of alcohol and alcoholic beverages, which are subject to excise duty, and the basis on which the excise duty is calculated. The categories are

• beer,
• wine,
• fermented beverages other than beer and wine (for example, cider and perry), intermediate products (for example, port and sherry) and
• ethyl alcohol (i.e. spirit drinks).

It also includes special provisions relating, for example, to reduced rates for small breweries and distilleries, certain products and geographical regions.

Included within the term "ethyl alcohol" is alcohol which is not necessarily intended as a beverage, for example, alcohol intended for industrial purposes, in the production of foodstuffs, medicines and so on. The general principle is that excise duty is only due on alcohol intended for human consumption as a beverage and, therefore, the Directive provides exemptions from excise duty, subject to rules, for these particular purposes.

Minimum rates

Although full harmonisation of the excise duty rates throughout the European Union was not considered necessary by the Council of Ministers for the proper functioning of the Internal Market, a series of minimum rates were agreed. Above these minimum rates Member States retain sovereignty to set excise duty rates at levels they consider appropriate according to their own national circumstances. Council Directive 92/84/EEC on the approximation of the rates of excise duty on alcohol and alcoholic beverages sets down these minimum rates.

This Directive requires that the Commission review these minimum rates periodically. The Commission's current report (COM (2004) 223) was presented to Council on 26 May 2004 (see press release IP/04/669  and FAQ MEMO/04/126 ).

Following the afore-mentioned report and subsequent discussions in the Council, the Commission on 8 September 2006 presented a proposal for a Directive (COM(2006) 486 (pdf 57 Kb)(57 Kb)  and press release IP/06/1165 ) amending Directive 92/84/EEC by increasing the minimum rates of excise duty in line with inflation. In particular, it revalorises the minimum rates in line with inflation from 1993 to 2005, (which is in the order of 31%) to take effect from 1 January 2008 and provides for transitional periods up to 1 January 2010 for those Member States that may have difficulties in increasing their national rates.

The control, holding and movement of duty-suspended alcohol and alcoholic beverages are subject to common provisions laid down in Council Directive 92/12/EEC.