ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (78)774
Vol.1978/0279

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(78)774 final
Brussels .17January 1979
REPORT BYTHE COMMISSION TOTHE COUNCIL
onthederogation accorded totheKingdom ofDenmark
relating totherules governing turnover tax andexcise
duty applicable ininternational travel (Council Direct
No69/169/EECof28May1969 amended byDirective No
4
•172/230 /EEC of12June 1972 )
C0M(78 )774 final
ElA£y
«Λ Τί?ç-A «m %*

Reportby"theCommissiononthederogation
accordedtotheKingdomofDenmarkrelating
totherulesgoverningturnovertaxand
excisedutyapplicableininternationaltravel(CouncilDirectiveNo.69/169/CKE(l)
of23May1969amendedbyDirectiveNo.
72/230/CEE(2)of12June1972)
I.Introduction
On19December1977,theCounciladoptedadirectiveaccordingtoDenmark
anewderogationfromtheCommunitysystemofallowances.
Onthisoccasion,theCommissionundertooktodrawupeachyear,starting
in1978,areportontheevolutionofthepricesofalcoholicdrinksand
tobaccoproductsinDenmarkandinGermany,ontheevolutionoffaresfor
travellersinDenmark,andonthefiscalpolicyoftheDanishGovernment.
Thepresentreportfulfilsthatundertakingforthefirstyearof
application ofthederogation.
II.Thederogatingprovisions
1.AnnexVII,PartV(Taxation)oftheActofAccessiontotheEuropean
CommunitiesoftheKingdomofDenmark,IrelandandtheUnitedKingdomof
GreatBritainandNorthernIrelandauthorisedDenmark,until31December
1975»"t°excludefromthetaxallowancesrelatingtoturnovertaxesand
excisesapplicableininternational passengertravel,thefollowinggoods
ιΓ
£.■–tobaccoproducts;
-distilledbeveragesandspirits,ofanalcoholstrengthexceeding22°:
3.-–beer,onlyforquantitiesexceeding2litres.
(1)OJNo.L133of4.6.1969
(2)OJNo.L139of17.6.1972

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2.Ontheexpirationofthisperiod,inaccordancewithparagraph1(c)
ofpartVoftheAnnexconcerned,theCouncilprolongedtheauthorisation
ontwooccasions^,firstuntil31December1976andthenuntil
31December1977*
3.TheDanishGovernmentsubsequentlyrequestedafurtherperiodin
orderfullytoapplythecommunitysystemofallowances.Incontrastto
thetwopreviousderogations ,whichwerelimitedtooneyear,theCouncil
adoptedon19December1977,aDirectivegrantingaderogationtoDenmark
(2)fromtheregimeinquestionuntil31December19C2V'.Thisderogation
providesforaprogressivealignmentoftheDanishsystemwiththeCommunity
rules.
III.Quantitiesofthetaxallowancessince1January1978
:DanishresidentshavingCommunityresidents
!stayedinanotherMemberstayingmDenmark !
!ProductsStai
I .;e
lessthanmorethani
lessthanmorethan
72h72h(3)24h24h(3)
cigarettes 40 300 40300
or
Icigarillos 20 150 20 150
or
Icigars 20 75 20 75
Ior
Ismokingtobacco 100 400 100 400
(grams)
Idistilledbeverages 1.5 1.5
I(litres)
Jbeer(litres) 2 noquantity 2no}
limit quantity J
I Ilimit !
(1)Directive76/134/3ECof20.1.1976(OJNo.L21of29.I.I976);Directive77/72/E3CofIS.1.1977(OJNo.L23of27.1.1977).
(2)Directive77/800/EECof19.12.1977(OJNo.L336of27.12,1977).
(3)ThesequantitiesarethoseapplicableundertheCommunitysystem.
/

-3-
""~"IV.Hclatr \re"evolution Oftrices of*heproducts inDenmark end inCorrn ?r:,y
Inorder that thereport "bytheCommission may "beprepared inthe course
ofeach year ,theprice comparison will "bemade from end–September toend-
September ofthefollowing year .
Theevolution inDenmark andinGermany oftheprices ofalcoholic drinks
andoftobacco products between end-September 1977 andend–Septembor1973
issummarised inthetable onpage 4.For this first report ,information
v:annotalways available forasystematic comparison ofspecified products .
However ,overall .thecomparison isacceptable andpermits aglobal
assessment oftherelative evolution oftheprices ofthese products .
I
(infuture ,theproducts shown inthetable for1978 will beused asthe
basis forcomparison ).
Finally ,itisnoted that thegapbetween Banish andGerman prices has
widened inthecase ofcigarettes andbeer ,whilst having narrowed inthe – -
case ofcognac andwhisky .Asregards cigarettes ,two-thirds ofthe
> ·
:•increase mtheprice gap isduetoanincrease inDanish prices and one–
third toareduction inGerman prices .The situation forbeer issimilar .
Asregards cognac andwhisky ,thereduction inthegapisalmost wholly -
duetoanincrease inGerman prices .
V.Evolution oftransport costs inDenmark
Transport costs areofparticular importance ifoneconsiders thepractice
ffp'°forganised trips or"shopping "excursions bybusfromDenmark into
A-^Germany . \
f
Thetable onpage 5shows theprice ofthis type oftransport between
.several Danish towns atamaximum distance ofabout 270kmandaminimum
distance of35kmfrom aGerman frontier town .Thelevel ofthese prices
seems extremely lowand itwould beinteresting tohave information
permitting acomparison with theprices charged fortrips ofthis kind on
other routes inside Denmark .
/

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EvolutionofthepricesoftypicaltobaccoproductsandalcoholicdrinksinDenmarkandinGermany^
1977
II II I1978
1 1 1 1
ProductsDanish
priceGerman
priceDifferenceProductsDanish
priceGerman
priceDiff.3as
ioof
17as
!ioof
I5Diff:
/j
12 3 4 5LJ7!8–2–!10
Cigarettes(3^'0) 204121.6582,35Cigarettes (300)210,-118,4291,5840,4I
I43,6+11%
Smokingtobacco,50S8,-7,480,52 6,5
ICognac,70cl,4155,7559,1996,56 Cognac***,70cl155,-60,6794,336260,8-2%
Whisky,75cl(DK40JS)
(Ger.4$)132.7542,8489,91Whisky(5years),fOcl
Gin,70cl
Aquavit,70cl(Danish)132,-
125,-
78,-47,06
43,18
49,8384,94
81,82
28,1767,764,3j
65,5|
36,1;-6%
Beer,Pilsen,6"bottles
(Danish)17,46
(8,68Beer,Pilsen6bottles
of0,331(Danish)18,60
(10,32)
■I49,755,5+19%
Beer,Pilsen,6bottles
(German) 8,78 Beer,Pilsen,6bottles
of0,331(Gerraan)1
.I
18,28 !
11
(l)AllpricesareexpressedinDanishcrov:ns.
j(2)Thesefiguresshowthepercentagechangesbetweenend-September1977and-end-oeptember1978in',hepricedi^xerenceo
;shownincolumns3ancl7«
I
I

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Evolution ofprices ofjourneys bybus "between Denmark andGermany forthe
years 1976/77and1978
IDeparture point Distance from the Retum ]price Difference in I
frontier inkm inDk :
ir.
,I Dkr . 1
1976/77 1978 1978/77
Aalborg (1) 270 55,- •50,- -5
!Viborg 192 ■25,- 25,- - I
I
IKolding (2) 35 5to15 2to101
I-3to-5
jOdense150 20,- 10,--10
(1)Lunch ,snack andboat trip included .
(2)According tothelength ofstay anddayoftheweek .
VI.Tax legislation
1.InDenmark ,since October 1977 "thelegislation relating tothetaxes
ontheproducts covered bythederogation from theCommunity allowances has
been changed asfollows :–
–Since 1April 1978 thetaxlevied oncigars ,"cheroots "andoncigarilloc
amounts inDenmark to19.8/erperpiece plus 10^oftheretail price
(before 1April ,"cheroots "were taxed perpiece whilst theexcise on
cigars andcigarillos wasmade upofaspecific element andanadvalorem
element ).Inaddition ,thetaxisnolonger calculated onthebasis of
thewholesale price ;theretail price nowserves asataxbase .
:Contrary tothecase ofcigarettes ,these changes donotresult from
Community provisions .They innowaychange thetaxburden borne by
these products .
On1July 197u,theapplication oftheprovisions oftheCouncil
Directive of19December 1977 (77/805/EEC)required amendment ofthe
specific element intheexcise oncigarettes .
/.

-6-
Sincethatdate,thiselementhasbeenchangedfrom36.7/erto32.7per
perpiece,:theproportionalelementgoingfrom13$to23.84$ofthe
retailprice.
Thischangeintherelationship betweenthespecificexciseandthe
proportional excisehasnot,however,requiredanychangeinthetotal
taxburdenoncigarettes.
-Thelevelsoftheratesofexcisesontobaccos(forsmokingetc.),on
alcohol,beerandwinehavenotbeenchangedsince1977.
-Asregardsthevalueaddedtax,theratewasincreasedfrom18$to
20.25$on1October1978.
Thisrateincreasehasnotthereforeinfluencedpricesduringthe
referenceperiod.However,since1Octoberofthisyear,thetax
burdenontheseproductshasincreasedinconsequence andwillhave
repercussions onretailprices.
I'oreover,asregardscigarettes,itshouldbenotedthatsincethatdate,
totakeaccountofthechangeintherateofthevalueaddedtax,the
specificexcisewaschangedfrom32.7/erto33.5perpiece,whilst
theproportional elementwasreducedfrom23.84$to22.41$.Thusthe
effectoftheincreaseinVAThasbeentoincreasethepriceofapacket
of20ordinarycigarettesfrom13*10Dkrto14Dkr.
2.InGermany,withtheexceptionofthevalueaddedtax,whosenormal
ratewasincreasedfrom11$to12$on1January1978,taxesrelating
totheproductswhicharethesubjectofthepresentreporthavenot
beenchangedduringtheperiodunderexamination .
/

-7-
VII .Revaluation ofthePeutsh Mark
Theparity oftheDanish crown wasmodified on16October 1978 .This
change ,which hasresulted inarevaluation of4$oftheHIinrelation
totheDanish crown ,hasnotaffected thedata during theperiod under
examination astheprices used were those applied attheendofSeptember
1978 .Itshould benoted that this parity change isdueinpart tothe
divergent evolution oftherates ofinflation inthese twocountries ,
(onthebasis oftheindex prepared bytheStatistical Office ofthe
European Communities ,9/SinDenmark and2.2$ inGermany during the
period concerned ).
VIII .Conclusions
Theinformation setout inthis report ,inparticular xnthetable shown
onpage 4andinpoint VIrelating toDanish taxlegislation forthe
products concerned ,donotshow anysignificant progress inreducing
thegaps between theprices ofthese products inDenmark and inGermany .
Infact ,itcanbestated that thegaps forcigarettes andbeer have
increased considerably whilst those forcognac andwhisky have narrowed
slightly .
Asregards thecost oftrips orshopping excursions into Germany the
comparison between thetwoyears shows atendency fortheprice of
bus trips inthedirection Denmark -German frontier andreturn to
ja&vdiminish .TheCommission suggests that theDanish Government should
*:.examine thereasons underlyxng thevery lowlevel ofprices forthese
trips .
V;,\
,-V'Itshould benoted that non–organised trips orprivate trips cannot
*,*
:benefit "from such advantageous terms .
:'d .'
Asregards thecoming year ,itisalready apparent that theincrease in
|vDenmark on1October 1978 intherate ofVATfrom18$to20.25$ ,will •
./•

-8-
haveaneffectonpriceswhichwill"beonlypartiallyredressed "bythe
increaseintherateofVATinGermanyfrom12$to13$from1July1979*
Inconclusion ,theCommissionnotesthatnosignificantprogresshas"been
achievedin1973in"bringingthesepricestogether.