CELEX: 62017CJ0030
Reference for a preliminary ruling
Tax provisions
Excise duties
Directive 92/83/EEC
Article 3(1)
Alcohol and alcoholic beverages
Beer
Flavoured beer
Degree Plato
Method of calculation

This request for a preliminary ruling concerns the interpretation of Article 3(1) of Council Directive 92/83/EEC of 19 October 1992 on the harmonisation of the structures of excise duties on alcohol and alcoholic beverages (
OJ 1992 L 316, p. 21
).
The request has been made in proceedings between the Dyrektor Izby Celnej w Poznaniu (Director of the Poznán Customs Administration, Poland) and Kompania Piwowarska S.A. w Poznaniu (‘Kompania Piwowarska’), concerning the amount of excise duty owed by that company on the sale of flavoured beers.
Legal context
European Union law
Directive 92/83
The fifth and sixth recitals of Directive 92/83 provide:
‘… in the case of beer, it is possible to permit alternative methods of calculating the duty on the finished product;
… in the case of beer, it is possible within certain limits to permit Member States to apply the duty to gravity bands of more than one degree Plato, provided always that no beer is charged at less than the Community minimum rate’.
Article 1(1) of that directive provides as follows:
‘Member States shall apply an excise duty to beer in accordance with this Directive.’
Article 2 of that directive reads as follows:
‘For the purposes of this Directive, the term “beer” covers any product falling within CN code 2203 or any product containing a mixture of beer with non-alcoholic drinks falling within CN code 2206, in either case with an actual alcoholic strength by volume exceeding 0.5% vol.’
Article 3(1) of Directive 92/83 is worded as follows:
‘The excise duty levied by Member States on beer shall be fixed by reference either:
–
to the number of hectolitre/degrees Plato,
or
–
to the number of hectolitre/degrees of actual alcoholic strength by volume
of finished product.’
Article 5 of that directive provides:
‘1.   Member States may apply reduced rates, which may fall below the minimum rate, for beer with an actual alcoholic strength by volume not exceeding 2.8% vol.
2.   Member States may confine the application of this Article to products containing a mixture of beer with non-alcoholic drinks falling within CN code 2206.’
Article 28 of Directive 92/83 states:
‘The United Kingdom may continue to apply the exemptions which it applied on 1 January 1992 to the following products:
–
concentrated malt beverage the worts of which prior to fermentation were of a specific gravity of 1200 of original gravity (47° Plato) or more;
…’
Directive 92/84/EEC
The second and seventh recitals of Council Directive 92/84/EEC of 19 October 1992 on the approximation of the rates of excise duty on alcohol and alcoholic beverages (
OJ 1992 L 316, p. 29
), state:
‘… Directive 92/83/EEC … lays down provisions relating to the harmonisation of the structures of excise duties on alcohol and alcoholic beverages;
…
… the methods of taxing beer within the Member States vary, and it is possible to permit this variation to continue, in particular by laying down a minimum rate expressed as a charge related both to the original gravity and to the alcoholic content of the product’.
Article 6 of Directive 92/84 provides:
‘As from 1 January 1993, the minimum rate of excise duty on beer shall be fixed at:
–
[EUR] 0,748 per hectolitre/degree Plato,
or
–
[EUR] 1,87 per hectolitre/degree of alcohol
of finished product.’
Polish law
Article 68 of the ustawa o podatku akcyzowym (Law on excise duties, as amended) of 23 January 2004 (Dz. U. No 29, item 257) is worded as follows:
‘1.   For the purposes of this Law, the term “beer” covers products listed in item 13 of Annex 2 and all mixtures of beer with non-alcoholic beverages classified under Heading 15.94.10 of the Polish Classification of Goods and Services (PKWiU) and CN code 220600, with an actual alcoholic strength by volume exceeding 0.5% vol.
…
3.   The basis of assessment for beer is the number of hectolitre/degrees Plato of finished product.
4.   The rate of excise duty on beer is 6.86 Polish zlotys (PLN) [approximately EUR 1.63] per hectolitre for each degree Plato of finished product.
5.   The minister responsible for public finances shall fix, by order, the methods of calculating the basis of assessment for beer, taking account of the bases of assessment which apply in the Member States.’
Paragraph 1(1) of the rozporządzenie Ministra Finansów w sprawie sposobu ustalania podstawy opodatkowania piwa (Regulation of the Minister for Finance on the methods of calculating the basis of assessment for beer) of 31 March 2004 (Dz. U. No 70, item 635), provides:
‘For the purposes of calculating the basis of assessment for beer, 1 degree Plato equals 1% by mass of the dry wort extract calculated on the basis of the alcoholic strength and real extract in the finished product.’
The dispute in the main proceedings and the question referred for a preliminary ruling
Kompania Piwowarska is a company established in Poland which produces beer, including flavoured beer under heading 2206 of the Combined Nomenclature and produced from traditional beer, to which sugar syrup, aromatic substances and water are added after the alcoholic fermentation process has been completed.
In its initial tax declaration, Kompania Piwowarska fixed the amount of excise duty on account of the sale of flavoured beer, taking account, in calculating the degrees Plato of that beer on the basis of the Balling formula, the ingredients which had been added before the completion of the fermentation process. The excise duty calculated on that basis was paid by the company.
Subsequently, that company applied to the tax authorities for a declaration that it had overpaid excise duties on the sale of flavoured beer in November 2004 and also corrected its original tax declaration on the basis that the overpayment resulted from the use of an incorrect number of degrees Plato. According to the company, the sugar content of the finished product must be deducted from the real extract before application of Balling’s formula, which can be applied only to traditional beer, in other words, to beer which does not contain additives.
Since that application for a declaration of overpayment was rejected by the first-instance tax authority and that rejection was confirmed by the appeal body, Kompania Piwowarska lodged an action before the Wojewódzki Sąd Administracyjny w Poznaniu (Regional Administrative Court, Poznań, Poland) which annulled the decisions of the first instance tax authority and the appeal body.
The Director of the Poznań Tax Chamber brought an appeal in cassation before the referring court against the judgment of the Wojewódzki Sąd Administracyjny w Poznaniu (Regional Administrative Court, Poznań).
The referring court notes that, in the present case, the weight of the flavoured beer is more than the dry extract of original wort, by reason of the increased density caused by the addition of sugar syrup and, to a lesser extent, the aromatic substances. It takes the view that it must determine whether Article 3(1) of Directive 92/83 requires, where the basis of assessment for flavoured beers is calculated using the Plato scale, to take into account the content of real extract of the finished product, including the extract resulting from the substances added when the fermentation process has been completed or to disregard the ingredients added after the completion of that process.
That court states that it must decide between two different approaches. According to the first approach, supported by Kompania Piwowarska, the concepts used to determine the basis of assessment for beer should be interpreted in their technical sense, specific to brewing, and cannot be modified for tax purposes. A degree Plato equivalent to 1% by weight of the dry extract of wort, only that extract and not the finished product should be used as a reference for determining the degree Plato. The degree Plato of flavoured beers should, therefore, be calculated, by means of the Balling formula, without taking account of the ingredients added after the completion of the fermentation process. That point of view is based on the idea, which follows from Article 3(1) of Directive 92/83, that, where the EU provisions give the possibility to adopt two alternative methods of calculating the basis of assessment for beer, those two methods must lead to similar results.
According to the second approach, supported by the Director of the Poznán Tax Chamber, taxation according to degrees Plato should take account of all the extracts present in the finished product, including the sugar added after the completion of the fermentation process. That approach is based on the fact that the legislature has provided that degrees Plato are to be determined on the basis of the finished product. That approach allows the same tax treatment to be applied to beers having the same quality of taste and with the same alcohol content in the finished product, regardless of differences in the production technique.
As it had doubts about the interpretation of Article 3(1) of Directive 92/83, the Naczelny Sąd Administracyjny (Supreme Court, Poland) decided to stay its proceedings and to refer the following question to the Court for a preliminary ruling:
‘In the light of Article 3(1) and the objectives of [Directive 92/83] in the determination of the basis of assessment for flavoured beers using the Plato scale, must the extract resulting from the aromatic substances added following the completion of fermentation be added to the real extract of the finished product or is the extract resulting from the added substances to be disregarded?’
Consideration of the question referred
By its question, the referring court asks essentially whether Article 3(1) of Directive 92/83 must be interpreted as meaning that, in order to determine the basis of assessment for flavoured beers according to the Plato scale, the dry original wort extract or the dry extract of the finished product including aromatic substances and sugar syrup added after the completion of the fermentation process, must be taken into consideration.
As a preliminary point it must be recalled, first, that according to Article 3(1) of Directive 92/83, the Member States may choose between two methods of calculating the basis of assessment for the excise duty on beer, namely by reference to the number of hectolitre/degrees Plato of the finished product or by reference to the number of hectolitre/degrees of actual alcoholic strength by volume of the finished product.
In the case of the Republic of Poland, it is clear from Article 68(3) of the Law on excise duties of 23 January 2004, in the version applicable at the material time, Article 1(1) of the Decree of the Minister for Finance on the methods for calculating the basis of assessment for beer of 31 March 2004 and the written submissions of the Director of the Poznán Customs Office, that that Member State opted for the method of calculation by reference to the number of hectolitre/degree Plato of the finished product.
Second it must be stated that, according to the information in the order for reference, the flavoured beer at issue in the main proceedings is produced from a traditional beer to which sugar syrup and aromatic substances are added, usually after the alcoholic fermentation is completed.
Third as the Advocate General observed, in point 44 of his Opinion, the concept of ‘original wort’ designates, up to the moment when the fermentation process begins, the mixture of water and other ingredients of the beer prepared for fermentation, such as barley malt and hops. The ‘dry extract of original wort’ consists of all of the ingredients of the original wort other than water.
As regards the question referred, it must be observed that the concept of ‘degree Plato’ mentioned in Article 3(1) of Directive 92/83 is not defined either in that directive or in other acts of the European Union. In those circumstances, the meaning and scope of that concept must be determined by considering its usual meaning in everyday language, while also taking into account the context in which it occurs and the purposes of the rules of which it is part (see, to that effect, judgment of 2 March 2017, Zentrale zur Bekämpfung unlauteren Wettbewerbs Frankfurt am Main,
C‑568/15
,
EU:C:2017:154
, paragraph
and the case-law cited).
In that connection, first, it is common ground that, according to its usual meaning in brewing, the Plato scale enables the calculation of the percentage of dry extract in the mass of the original wort, one degree Plato being equivalent to 1 g of dry extract per 100 g of original wort. It follows that, as is commonly understood in brewing, the degree Plato is calculated without taking into account the aromatic substances and sugar syrup added in flavoured beer after the fermentation process.
The use of the term ‘finished product’ in Article 3(1) of Directive 92/83 is not of such a nature as to challenge that interpretation. As the European Commission rightly observed, the fact that Article 3(1) of Directive 92/83 refers to degrees Plato of the finished product means that the number of degrees Plato must be a value determining a characteristic of the finished product, irrespective of whether the number of degrees is measured in the finished product or at an earlier stage of the production process.
The degrees Plato which measure the dry extract in the original wort used for fermentation continue to characterise all of the finished products from that wort, whether those product are traditional beer or flavoured beer.
Second the contextual analysis confirms that, within the framework of Directive 92/83, the calculation of the degrees Plato of flavoured beer cannot take account of the aromatic substances and sugar syrup added after the fermentation process has been completed.
In that connection, reference must be made on one hand, to Article 28, first indent, of Directive 92/83, which also makes use of the concept of ‘degrees Plato’. According to that provision, the United Kingdom may continue to apply the exemptions in force on 1 January 1992 concerning, in particular, a concentrated malt beverage the worts of which prior to fermentation were of a specific gravity of 1200 of original gravity (47° Plato) or more.
As the Advocate General observed in paragraphs 93 and 96 of his Opinion, it is clear from Article 28, first indent, that, for the application of that provision, the degrees Plato are to be calculated from the specific gravity of the original wort before its fermentation and it is not possible that, without any indication to that effect, the EU legislature intended to impose, in two provisions of the same directive, two different methods for calculating the degrees Plato.
On the other hand, in the contextual interpretation of Directive 92/83, it is justified to take into consideration Directive 92/84 laying down a minimum rate of excise duty on beer, the structure of which is determined by the first of those directives. It must be observed that the seventh recital of Directive 92/84 provides that the methods of taxing beer within the Member States vary and it is possible to permit this variation to continue, in particular by laying down a minimum rate expressed as a charge related both to the original gravity and to the alcoholic content of the product.
That minimum rate is fixed in Article 6 of that directive, in accordance with the number of hectolitres per degree Plato of the finished product or the number of hectolitres per degree of alcohol of the finished product. Therefore, the reference to the original gravity of the product, in the seventh recital of that directive, must be interpreted as referring to the method of calculation of excise duties on beer based on the degrees Plato of that beer, whereas the reference to the alcohol content of the product, in the same recital, must be interpreted as referring to the calculation method of excise duty having regard to the degree of alcohol. It follows that the degrees Plato must be calculated, for the purposes of Article 6, by taking account of the original gravity of the beer, that is, its original wort.
The two methods of setting the minimum rate of excise duty mentioned in Article 6 of Directive 92/84 correspond to two methods of determining the excise duty referred to in Article 3(1) of Directive 92/83. ‘Finished product’ is also used in the same way in the two articles.
It follows from the foregoing that, taking account of its usual meaning and the context in which it is used, the concept of ‘degree Plato’, referred to in Article 3(1) of Directive 92/83, must be interpreted as constituting a unit of measurement referring to the original gravity of the beer and, therefore, of its original wort.
Third, it must be observed that such an interpretation is also confirmed by the examination of the objectives pursued by the legal regime established by Directives 92/83 and 92/84.
Directives 92/83 and 92/84 aim to impose a minimum level of excise duty per hectolitre of beer, whether or not it is flavoured, which is higher the more its alcohol content increases. The excise duty provided for by those directives is therefore intended, as the Advocate General observed in point 101 of his Opinion, to tax the alcohol consumed.
Thus, Article 2 and Article 5(1) of Directive 92/83 provide respectively for exemptions from taxation for beer or flavoured beer which have a percentage of alcohol less than 0.5% vol. and the application of reduced rates less than the minimum rate, to beer with an alcoholic strength of not more than 2.8% vol. In addition, it is clear from Article 6, second indent, of Directive 92/84 that the minimum amount of the excise duty on beer where it is calculated in accordance with its degree of alcohol is directly proportionate.
As far as concerns the determination of the basis of assessment for excise duty according to the Plato scale, it is agreed by the parties in the main proceedings that, in principle, the higher the percentage of dry extract of original wort, the higher alcohol content of the beer produced from that original wort.
However, as the Advocate General stated, in point 107 of his Opinion, the ingredients added after fermentation have no effect on the alcohol content of the finished product. Therefore, calculating the degrees Plato of a flavoured beer by taking into account not only the dry extract of the original wort but also the aromatic substances and the sugar syrup added to it after fermentation could lead to taxing that beer more than a traditional beer with the same degree of alcohol.
Having regard to all of the foregoing considerations, the answer to the question referred is that Article 3(1) of Directive 92/83 must be interpreted as meaning that, in order to determine the basis of assessment for flavoured beers according to the Plato scale, the dry extract of the original wort must be taken into consideration but not the aromatic substances or sugar syrup added after the completion of fermentation.
Costs
Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Fourth Chamber) hereby rules:

Article 3(1) of Council Directive 92/83/EEC of 19 October 1992 on the harmonisation of the structures of excise duties on alcohol and alcoholic beverages must be interpreted as meaning that, in order to determine the basis of assessment for flavoured beers according to the Plato scale, the dry extract of the original wort must be taken into consideration but not the aromatic substances or sugar syrup added after the completion of fermentation.

[Signatures]
(
*1
)	Language of the case: Polish.