EU rules for the taxation of alcohol
Directive 92/83/EEC — harmonised structures of excise duties on alcohol and alcoholic drinks
WHAT IS THE AIM OF THIS DIRECTIVE?
It sets out European Union (EU) rules for taxes on alcohol (ethyl alcohol or ethanol, i.e. the form of alcohol used in alcoholic drinks) and alcoholic drinks, the categories of alcohol and alcoholic drinks subject to taxes, and the basis on which the tax (duty) is calculated.
The duty levied per unit on beer is based on the number of hectolitre/degrees Plato* or hectolitre/alcohol by volume (one degree Plato is legally equivalent to 0.4% alcohol by volume) of finished product.
EU countries can divide beers into categories consisting of no more than 4 degrees Plato, e.g. 15o-19o, and may charge the same rate of duty per hectolitre on all beers in each category.
Reduced rates of excise duty can be applied to beer brewed by small, independent companies, as long as those rates:
are not applied to brewers producing more than 200,000 hl of beer per year;
are not more than 50% below the standard national rate of excise duty.
Reduced rates must apply equally to beer delivered into that country from small breweries situated in other EU countries.
Reduced rates, which may fall below the minimum rate, can be applied to weaker beers, i.e. those with a maximum alcoholic strength by volume of 2.8% vol.
Wine and other fermented drinks
The duty levied on still and sparkling wine and other fermented drinks and intermediate products (e.g. port and sherry) is based on the number of hectolitres of finished product.
EU countries must levy the same rate of duty within each category of drink.
A reduced rate of excise duty can be applied to any type of wine and other fermented drinks (except beer) with a maximum alcoholic strength by volume of 8.5% vol.
EU countries may apply a single reduced rate to intermediate products with an maximum alcoholic strength by volume of 15% vol. if this rate is:
not more than 40% below the standard national rate;
not less than the standard rate applied to still wine and other still fermented drinks.
The duty levied on pure alcohol and spirit drinks is based per hectolitre of pure alcohol, when measured at a temperature of 20oC.
Reduced rates may be applied to ethyl alcohol (ethanol) produced by small distilleries; however, this may not be more than 50% below the standard national rate of excise duty.
EU countries must apply any such reduced rates equally to ethyl alcohol originating from small distilleries in other EU countries.
Subject to certain limits, reduced rates may also be applied to spirits with a maximum actual alcoholic strength by volume of 10% volume and to French rum and Greek ouzo.
The products covered by this directive are exempt from excise duty if they are:
denatured* in accordance with the requirements of any EU country;
denatured and used to make products not intended for human consumption;
used to produce vinegar, medicines or food flavourings.
List of excise duties
The European Commission publishes a full list of excise duty rates in force in EU countries twice a year.
Possible revision of Directive 92/83/EEC
In order to assess if Directive 92/83/EEC is still fit for purpose, the Commission carried out a REFIT (regulatory fitness and performance programme) evaluation. REFIT is a programme to review all EU legislation — to identify burdens, inconsistencies, gaps or ineffective measures — and to make the necessary proposals to follow up on the findings of the review. The final external evaluation report is now published.
In October 2016, the Commission published a report evaluating Directive 92/83/EEC, as well as a staff working document (and an executive summary of the latter).
FROM WHEN DOES THE DIRECTIVE APPLY?
It has applied since 10 November 1992. EU countries had to incorporate it into national law by 31 December 1992.
For more information, see:
* KEY TERMS
Degrees Plato: the number of degrees Plato measures the percentage in weight of the original extract per 100 grams of beer. This value is calculated from the actual extract and the alcohol contained in the finished product.
Denatured alcohol: ethyl alcohol made unfit for drinking by adding one or more chemicals to it.
Council Directive 92/83/EEC of 19 October 1992 on the harmonization of the structures of excise duties on alcohol and alcoholic beverages (OJ L 316, 31.10.1992, pp. 21–27)
Successive amendments to Directive 92/83/EEC have been incorporated into the original document. This consolidated version is of documentary value only.
Council Directive 92/84/EEC of 19 October 1992 on the approximation of the rates of excise duty on alcohol and alcoholic beverages (OJ L 316, 31.10.1992, pp. 29–31)
Report from the Commission to the Council on the evaluation of Council Directive 92/83/EEC on the structures of excise duties on alcohol and alcoholic beverages (COM(2016) 676 final, 28.10.2016)
Commission Staff Working Document — Evaluation Accompanying the document — Report from the Commission to the Council on the evaluation of Council Directive 92/83/EEC on the structures of excise duties on alcohol and alcoholic beverages (SWD(2016) 336 final, 28.10.2016)
Commission Staff Working Document — Executive Summary of the Evaluation Accompanying the document — Report from the Commission to the Council on the evaluation of Council Directive 92/83/EEC on the structures of excise duties on alcohol and alcoholic beverages (SWD(2016) 337 final, 28.10.2016)
last update 28.11.2016