The higher VAT rates have been abolished. They have led to reductions in the number of VAT rates and to appreciable cuts in those rates. The aim is to eliminate possible distortion of competition and relocation of activity while rates are insufficiently aligned. Special arrangements remain for distance sales, purchases by exempt taxable persons or non-taxable legal persons, and sales of new means of transport. As regards trade with third countries, imports are still subject to customs declaration requirements and are taxed on importation.
Exports continue to be exempt subject to completion of the usual customs formalities.
The Community rules on excise duties are a recent development. Unlike in the VAT sphere, general definitive arrangements govern the holding, movement and monitoring of products subject to excise duty . The principle which has been adopted is that of taxation in the country of consumption. A territorial framework for the holding and movement of products subject to excise duty has been defined. The arrangements apply to alcoholic beverages, manufactured tobacco and mineral oils, and allow goods to be moved with suspension of excise duty and without checks at intra-Community frontiers.