Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
Article: Council adopts new minimum EU excise duty rates for alcoholic drinks
04 August 2020
The Council has confirmed last month's agreement to update EU
rules for excise duties on alcoholic drinks with special provisions
for small, especially micro, breweries and incentives to produce
lower alcohol products.
The new directive, finally adopted July 30 after a written
procedure, brings in an EU-wide certification system for small and
artisan drinks producers to ensure access to lower excise duty
rates across Europe.
The directive, which will apply from January 1, 2022, also
increases the threshold at which reduced rates apply to lower
strength beer to 3.5% alcohol by volume (ABV) to encourage brewers
to produce low alcohol products.
"The alcoholic strength of beer to which reduced rates for
low-strength beer may be applied is in general too low to provide
any tangible incentive for brewers to be innovative and create new
low-strength products," says a recital to the text circulated.
In another change, the directive will require all ingredients in
beer, including those added after the completion of fermentation,
to be taken into account when measuring the degree Plato, used to
quantify the concentration of extract as a percentage by
weight.
However, member states that currently do not take ingredients
added after fermentation into account can continue to measure the
degree Plato in this way until December 31, 2030.
Avoiding discrimination
The text agreed by written procedure also appears to respond to
criticism by spiritsEUROPE that the new directive discriminated
between different alcoholic drink categories by allowing beer and
cider a more favourable excise duty regime than spirits.
"In order to avoid other alcoholic beverages being treated
differently from beer and ethyl alcohol, Member States should also
have the power to apply reduced rates to other alcoholic beverages
produced in small volumes by independent small producers," it
states.
The text agreed further allows member states "to limit the
application of reduced rates to intermediate products and other
fermented beverages, taking into account various criteria, such as
the alcoholic strength of the finished product or the quantity and
type of raw materials used to produce it."
In a statement welcoming the directive's adoption, the European
Commission said the new rules "pave the way for a better business
environment and reduced costs for small alcohol-producing
businesses."
Counterfeiting tackled
"Consumer health will also benefit from a crackdown on the
illegal use of tax-free denatured alcohol to make counterfeit
drinks," the Commission statement continued.
The directive will allow member states "under strict conditions"
to waive or lower excise duty on small volumes of fruit spirits
made by individuals from fruit grown on their own land.
But member applying reduced rates or exemptions will have "to
take the necessary measures to prevent any evasion, avoidance or
abuse," such as registration of stills with details of their
production capacity.
Moreover, member states will have to apply "effective,
proportionate and dissuasive" penalties to anybody that abuses the
system to produce low or no duty alcohol illegally.
The Commission is to monitor the introduction of national
waivers or reduced excise rates for private production and report
back to the Council on its findings.
EU Commissioner for Economy Paolo Gentiloni said that the
agreement "is a welcome move towards a more modern and fairer tax
regime for alcohol which also supports our fight against
fraud."