Tax & Customs Issues
To preserve the proper functioning of the Internal Market, avoiding increases of minimum excise duties on wine products and promoting the smooth implementation of the EMCS.
- Preventing the introduction of positive minimum rate for wines, that would seriously undermine the competitiveness of the EU wine sector and aggravate the market imbalances in contradiction with the key objectives of EU wine policy within the CAP.
- Preventing any substantial review of the definition of the structures of excise duties on alcohol beverages that may have unintended consequences on the classification of traditional wine products, or lead to discrimination and uncertainty on the well established customs and fiscal treatment of the vast majority of alcohol beverages. Instead, we advocate for addressing further marginal questions on classification through appropriate soft-law guidelines for enforcement authorities and economic operators in the framework of the relevant DG TAXUD Committees.
- Identifying practical issues that could emerge in the EMCS implementation, in dialogue with MS and EC DG TAXUD, and ensure consistency for de-materialisation of accompanying documents and registers in the wine sector (CMO) in line with EMCS scheme. This would help avoiding delays and technical or legal inconsistencies in the implementation of the EMCS by the MS, which could be detrimental to the effective dematerialisation of the fiscal and accompanying documents for wines, and therefore hinder the smooth functioning of the internal market for our products or create additional costs for the economic operators of our sector.
- Advocating for the inclusion of goods subject to illegal non-EU parallel imports within the scope of ex-officio customs authorities’ intervention, or at least to allow MS to authorize their national Customs offices to accept requests for seizures of non-EU parallel imports. This would allow alleviating the costs and negative consequences for the concerned right holders, the relevant enforcement authorities / courts and consumers.
The Council Directive 92/84/EEC on the approximation of the rates of excise duty on alcohol and alcoholic beverages requires that the Commission review these minimum rates periodically. The Commission's latest report (COM (2004) 223) was presented to the Council in May 2004. In September 2006, the Commission presented a proposal for a Directive amending Directive 92/84/EEC proposing an increase of the minimum rates of excise duty in line with inflation from 1993 to 2005 (approximately 31%) to take effect from 1 January 2008 and provided for transitional periods for those Member States that may have difficulties in increasing their national rates. No change was proposed to the zero minimum rate for wine and other fermented beverages. However, neither this proposal nor an ulterior attempt by the Swedish Presidency (end 2009) was supported by the Council.
Following a study commanded by the EC to London Economics’ in June 2010, analysing possible changes in the minimum rates and structures of excise duties on alcoholic beverages, it was concluded that any change, in particular to remove the zero-rate on wine and fermented beverages, would be very difficult, and the prospects of achieving unanimity on an adjustment of rates for inflation still seemed very scarce.
Responding to doubts and differences of interpretation among national customs authorities about the classification of certain fortified or ‘cleaned-up’ fermented alcohol products, the WCO modified in 2012 the Explanatory Note to the heading 22.07 within Chapter 22. At EU level, the European Commission published in January 2013 a modification of the EU CN Explanatory Notes to the headings 2206 and 2208 in order to codify in the EU legislation the criteria for classification of the alcohol products referred to in key recent ECJ rulings, namely “Siebrand” (C-150/08) and “Paderborner” (C-196/10)
Customs legislation- Following a broad consultation, DG TAXUD launched in May 2011 a proposal for a review of customs legislation on enforcement of intellectual property rights (R. 1383/2003). It aimed i.a. at revising the existing EU Regulation on Customs intervention against counterfeit imports which includes parallel imports from Third Countries in the scope of possible Customs seizures. The Council and the EP have not retained the EC proposal to this regard.
Wines and wine products are subject to EU legislation in the area of excise duties which was adopted in the framework of the establishment of the Internal Market on 1st January 1993. This legislation, which has been further developed since then, can be divided into three main categories:
- The structure of the tax to be applied to a particular group of products (the way in which the excise duty is calculated and the scope of possible exemptions);
- The minimum rates of duty that Member States have to respect for each type of product. Above those minimum rates, Member States can freely fix their own rate levels within the limits of the Treaty rules;
- General provisions that concern in particular the circulation of excise products between Member States.
The rates and structures of the excise duty system applicable to alcohol and alcoholic beverages is set down in three EU Directives:
- Council Directive 92/83/EEC - structures of excise duties on alcohol and alcoholic beverages
- Council Directive 92/84/EEC - rates of excise duty on alcohol and alcoholic beverages, which i.a. sets a 0 minimum rate for wines and other fermented beverages;
- Council Directive 92/12/EEC - common rules on control, holding and movement of duty-suspended alcohol and alcoholic beverages.
Relevant common basic legislative instruments applicable also to alcohol beverages are:
- Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and repealing Directive 92/12/EEC
- Commission Regulation (EC) No 684/2009 of 24 July 2009 implementing Council Directive 2008/118/EC as regards computerized procedures for the movement of excise goods under suspension of excise duty (« EMCS »).
- Commission Regulation (EEC) No 3649/92 of 17 December 1992 on a simplified accompanying document for the intra-Community movement of products subject to excise duty which have been released for consumption in the Member State of dispatch.
- Commission Regulation (EC) No 31/96 of 10 January 1996 on the excise duty exemption certificate.
These instruments have been supplemented by Commission Recommendation 2000/789/EC of 29 November 2000 setting out guidelines for the authorization of warehouse keepers under Council Directive 92/12/EEC in relation to products subject to excise duty.
As any other good, wine and wine products are classified for tariffs purposes under the international Harmonized System (HS) of the World Customs Organisation (WCO) and the EU Combined Nomenclature (CN) of the EU Common Custom Tariff. This determines which rate of customs duty applies and how the goods are treated for statistical purposes. By virtue of the Council Directive 92/83/EEC on structures of excise duties on alcohol beverages the CN also determines the classification of our products for the purpose of taxation. Therefore, any evolution of the subheadings or the Explanatory Notes to Chapter 22 headings can have a potential impact on classification criteria of alcohol beverages within the HS / CN, thus on tariffs and excise duties effectively applied to our products in the EU and external markets.