Representation in Ireland

EU public consultation: alcohol excise duty rules

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Bottles of wine

The European Commission has launched a public consultation on the common European rules for setting alcohol excise duties. The results of the consultation will help shape new EU excise rules due later this year.

21/04/2017

Clearer, simplified rules are expected to benefit small craft breweries and distilleries in particular. They will also help fight against dangerous counterfeit alcohol.

The consultation, accessible here, will run until 7 July 2017. The results will shape the Commission's recommendations for changes to alcohol duty rules, which are due to be published later this year. The rules were last changed in 1992.

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Excise duty is a tax charged on the production of certain goods like alcohol, as opposed to VAT which is charged on sales to consumers. Countries set their own individual excise rates above a common EU minimum, with Ireland currently having the highest rates on wine in the EU and the second highest rates for alcohol overall.

Currently, EU rules set out how alcoholic products are categorised for excise tax purposes and the methods for charging excise duties. They also cover the kinds of exceptions from excise duty that are allowed. Without common EU rules, unfair competition between producers in different countries would be much easier and it would be harder for national authorities to collect the right amount of duty. Common rules also reduce administrative burdens for exporters and governments.

But these rules have not changed since 1992, and a recent study by the Commission has suggested that updated, clearer rules would particularly benefit smaller breweries and distilleries. Revised rules could also help in the fight against dangerous counterfeit alcohol and foster fairer trade practices.

In particular, producers currently face problems where differences in national application of the common rules leads to products possibly being in different tax categories in different countries.

The Commission is looking to gather the views of EU citizens and interested groups on ways the current system could be improved and to understand the impact of any changes to the rules.In December, national Finance Ministers asked the Commission to further examine possible changes to the 1992 rules. The public consultation forms part of this examination. The Commission will report its findings back to Ministers before preparing a formal proposal for revisions to the rules.