ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(82)673
Vol.1982/0210

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COMMISSION OFTHEEUROPEAN COMMUNITIES
onthederogation accordedtotheKingdomofDenmarkrelatingtothe
rulesgoverningturnovertaxandexcisedutyapplicable ininternational
travel(CouncilDirective No69/169/EECof28May1969amendedby
Directives Nos72/230/EECof12June1972,78/1032/EEC,78/1033/EEC
of19December1978,81/933/EECof17November1981and82/443/EECCOM(82)673 finalBrussels ,22
A
R%,"vrè-^October1982
FIFTHREPORTBYTHECOMMISSION TOTHECOUNCIL
of29June1982)
C0M(82)673final

FifthreportbytheCommission
onthederogation accordedtotheKingdomofDenmark
relatingtotherulesgoverning turnover taxand
excisedutyapplicable ininternational travel
(CouncilDirective No.69/l69/EEC(l)of28May1969
amendedbyDirectives Nos.72/230/EEC(2)of12June1972,
78/1032/EEC(3),78/1033/EEC(3)of19December 1978,
81/933/EEC(4)of17November 1981and82/443/EEC(5)of29June1982)
INTRODUCTION
1.On19December 1977,"theCounciladoptedadirective according to
Denmarkanewderogation fromtheCommunity systemofallowances .Onthis
occasion,theCommission undertook todrawupeachyear,startingin1978,
areportontheevolution ofthepricesofalcoholic drinksandtobacco
products inDenmarkandGermany,ontheevolution offaresfortravellers
inDenmark,andonthefiscalpolicyoftheDanishGovernment .Thefirst
fourreports (COM(78)774,C0M(80)33,C0M(80)880,andC0M(8l)806)each
coveredaone-yearperiod(1October-endSeptember ).Inviewofthefact
thatthederogation expiresattheendofthisyear,partIofthisfifth
reportisconfinedtothe9-monthperiod,1October1981-30June1982,
whilstpartIIprovides ageneralreviewoftheoverallchangesduringthe
firstfourandahalfyearsofthefive-year derogation period.
Thederogating provisions
2.AnnexVII,PartY(Taxation )oftheActofAccession totheEuropean
Communities oftheKingdomofDenmark,IrelandandtheUnitedKingdomof
GreatBritainandNorthernIrelandauthorised Denmark,until31December
1975,toexcludefromthetaxallowances relatingtoturnovertaxesand
(1)OJNo.L133of4.6.1969
(2)OJNo.L139of17.6.1972
(3)OJNo.L360of28.12.1978
(4)OJNo.L338of25.II.1981
(5)OJNo.L206of14.7.1982 .

excisesapplicable ininternalionalpassengertravel,thefollowing goods:
-tobaccoproducts ;
-distilledbeverages andspirits,ofanalcoholicstrengthexceeding 22$vol;
-beer,onlyforquantities exceeding 2litres.
3.Ontheexpiration ofthisperiod,inaccordance withparagraphl(c)of
partVoftheAnnexconcerned ,theCouncilprolonged theauthorisation ontwo
occasions (l),firstuntil31December1976andthenuntil31December1977.
4.TheDanishGovernment subsequently requested afurtherperiodinorderfully
toado.pttheCommunity systemofallowances .Incontrasttothetwoprevious
derogations ,whichwerelimitedtooneyear,theCounciladoptedon
19December 1977,aDirectivegrantingaderogation toDenmarkfromtheregimein
questionuntil31December1982(2).Thisderogation providesforaprogressive
alignment oftheDanishsystemwiththeCommunity rules.
5»Quantities ofthetaxallowances since1January 1978
Danishresidents having Community residents
stayedinanotherMember stayinginDenmark
State
lessthan morethan lessthanmorethan
72h(3)72h(1)(3)24h(2)24h(1)
cigarettes 40(4) 300 40 300
or
cigarillos 20 150 20 150
or
cigars 20 75 20 75
or
smokingtobacco 100 400 100 400
(grams)
distilled beverages 1.5mm 1.5
(litres)
beer(litres) 2 noquantity 2 noquantity
limit limit
(1)Thesequantities arethoseapplicable undertheCommunity system*
(2)PromI.I.I98Othe24hourcondition nolongerapplied.
(3)From1.1.1981 the72hourcondition wasreducedto
48hours.
(4)Prom1.1.1982 the40cigarette allowance wasincreased to60,
(1)Directive 76/134/EECof20.1.1976(OJNo.L21of29.I.1976);Directive 77/72/EECof18.1.1977 (OJNo.L23of27.1.1977).
(2)Directive 77/8OO/EECof19.12.1977 (OJNo.L336of27.12.1977).

6.TheDanishauthorities havereported ,that,following theincrease from
40to60cigarettes from1.1.1982 ,intheallowance ofcigarettes for
Danishresidents stayinginanotherMemberStatelessthan48hours,the
increased allowance appearstoheutilised ..However,nostatistics are
available tomeasuretheeffects onthefiscal "budget.
PARTI-EVOLUTION ISTHE9-MONTH PEKIOD 1OCTOBER 1981-30JUKE1982
Taxlegislation
Deiimark
7.On9June1982,theDanishFolketing adoptedincreases inallexcise
dutiesonproductsdealtwithinthisreport.Prom15June1982,the
specific elementintheexciseonspirits xra.sincreased from9«500Dkrperhi
ofpurealcoholto10.800Dkrperhipurealcohol.Theexcisedutiesontobacco
products andbeerwillbeincreased from15December 1982.Forcigarettes ,
thespecific elementintheexcisewillbeincreased from0.41Dkrto0.4686Dkr
perpieceandtheadvaloremratewillbechangedfrom21,68%to21,31°]°ofthe
retailprice.Intotal,theretailpriceofapacketof20cigarettes willgo
upby2Dkrto19»30Dkr.Onpipetobaccoandfine-cut tobacco,theratewill
beincreased respectively from73Dkrto102Dkrperkgandfrom25ODkrto
420Dkrperkg.Prom15December 19&2theexciseratesonbeerwillalsobe
increased byaround17c/owhich,forthemostconsumed typeofbeer,meansan
increase from309»55Dkrto361,15Dkrperhi.
Inaddition,theDanishFolketing agreedthattheexcisedutyratesongjirits ,
tobaccoandbeer(andothers)shallsubsequently befollowedbyanindexation
oftheratesuntil1October 1983.TheVA'i'-rate wasnotchanged.
Germany
8.On1April1982,theexciserateonspiritswasincreased from2.250DM
to2.550Dkperhipurealcohol.Oncigarettes ,thespecific elementinthe
excisewasincreased from0,041DMto0,0565 DMperpieceandtheadvalorem
ratechangedfrom30,1cjoto31,5~h0±*"theretailprice.Neitherthebeer
dutynortheVAT-rates werechanged.

-4-
Danishcrown/Germanmarl'
9.Inthenine-month period,nolessthanthreerealignments ofparities
withintheEMStookplace.On4October 1981andon11June1982theGerman
markwasrevalued "by5t5%a*id4,25%respectively againsttheDanishcrown
andonFebruary 1982theDanishcrownwasdevalued "by3%againstthe
Germanmark.Thisrealignment oftheparities meantthatwhilsttheaverage
exchangerateinSeptember 1981was313»85Dkr=100DM,therateattheend
ofJune1982was346Dkr=100DM-thatis,aweakening oftheDanishcrown
vis-a-vistheGermanmarkby10Jo.
Relative evolution ofretailpricesoftheproducts inDenmark andinGermany
10.Theevolution inDenmarkandinGermanyofthepricesoftobaccoproducts
andofalcoholic drinksbetweenend-September 1981andend-June 1982is
summarised inTable1.Theproducts usedasthebasisforcomparison arethe
sameproducts asshowninthesametableinthefirstfourreports .The
pricesshownhavebeenfurnished bytheDanishGovernment .Theyarebasedon
averagepricesinDenmarkoftheproducts concerned andontypicalpricesfor
thesameproducts onsaleinGermanyintheregionclosetotheDanishborder.
Tobaccojaroducts_
11.Thesubstantial increase intheGermanexciseoncigarettes andthe
realignment ofthecurrencies morethanhalvedthepricegapbetweenDanish
andGermancigarettes ,reducing thepriceadvantage toaDaneofbuying
cigarettes inGermany from40a/oto20'p.Forpipetobacco,asaresultof
priceincreases inGermany,theDanishpriceisnowconsiderably belowthe
German(andwillremainbelowaftertheend-1982 Danishtaxincrease-seepara^-
graph7).
12.Retailpricesofcigarsandcigarillos arenotshowninTable1because -
comparable figuresdonotexist,butinformation fromtheDanishGovernment
indicates thatforthesamebrandofcigarstheretailpriceinDenmark was
3,00Dkrand0,76DM(2,63Dkr)inGermany.Forcigarillos ,theretailprices
were1,70DkrinDenmarkand0,40DM(1,38Dkr)inGermany.Inbothcasesthe
pricegapdoesnotseemtobegreaterthanformanyother,non-excise products ,
duetotheconsiderable difference intheVATrates(22%inDenmark,13%in
Germany).

-5-
TABLE1
Evolution oftheretailpricesoftypicaltobaccoproducts and
alcoholic drinksinDenmark andGermany .1Septémber 1901-endJune1962
PRODUCTSDate Danish
price
inDkrGermanprice
in
Dkr*MDiff.
in
Dkr.
(D-(2)(4)as
$Of
(1)
(1)(2)(3) (4)(5)
Cigarettes (300)DanishSept.I98I256,50141,32 45,00115,2844,9$
brand
ChangeI98I-82June1982259,50
1,2$207,60
46,9$60,00
33,3$51,90
-55,0$20,0$
-24,9$
Smoking tobacco ,50g
ChangeI98I-82Sept.I98I
June19829,10
9,?5
1»6$ >9,73
24,22
149lo3,10
7,00
126'/o-0,63
-14,97-6,9I
162
Cognac***70cl
ChangeI98I-82Sept.I98I
June1982204,00
211,00
3,4$67,79
89,61
32,3$21,60
25,90
19,9$136,21
121,39-10,9$66,8$
57,5$-9,3$
Whisky(5years)70cl
Change198I-82Sept.I98I
June1982108,00
126,50
17,1*53,29
69,20
29,9$16,98
20,00
17,8$54,71
57,30
4,7$50,7$
45,3$-5,4$
Gin.70cl
ChangeI98I-82Sept.I98I
June1982123,00
129,95
5,7$51,63
65,39
26,7$16,45
18,90
14,9$71,37
64,56-9,5$58,0$
49,7$-8,3$
Acruavit,70cl(Danish )
ChangeI98I-82Sept.I98I
June198287,00
98,35
13,0$60,26
82,69
37,2$19,20
23,90
24,4$26,74
15,66^1,4$30,7$
15,9$-14,8$
BeerPilsen 6bottles
of0,331(Danishbeer)Sept.I98I
June198221,60
22,80
5,6$13,97
20,594,45
5,957,63
2,2135,3„9,7$
Change1981-82 47,4$33,7/o-71,0$-25,6$
♦Exchangerateusedï
end-September 1981:100DM=313.85Dkr
end-June 1982 s100DM=346.00Dkr

-6-
_Sp_irit_s
13.Forallfourspiritsproducts mentioned ,inTable1,thepricegap
hasbeenreduced .Onwhiskythereduction wasnotmorethanabout5"hbuton
aquavitthepricegapwasnearlyhalvedandisnowaslowas16%.iVorCognac
theGermanpriceisstilllessthanhalftheDanishprice.
Beer
14.IntheGermanbordershopsthepriceofDanishbeerhasgoneupbya
thirdduringthenine-month period.Thislargepriceincreaseissaidto
beduetothefactthatthebordershopshavenowceasedtoofferspecial
reductions andthelikeonDanishbeer.Asacomparison ,theretailprice
ofGermanbeerintheseshopsroseonlyslightly ,from3,25to3,45DM
(6L/opriceincrease).Oncomparable beer}thepricegapinJune1982has
nowbeenreducedtoaslittleas10%,whereasinSeptember 1931itwas35°/o.
Transport costsinDenmarK
15.Table2belowshowsthatpricesfororganised day-tips or"shopping
excursions "-eventhoughfewofthemwentupintheperiodunderreport-
arestillverylowcompared withthecostsofusingalternative meansof
transport .Inthesameperiod,thecostsofpetrolwentupby15%,whereas
thecostsbytrainremained moreorlessunchanged ,exceptfromAalborg,
wherethepriceincreased by12c/b.
./•

TABLE2:Transport costs
Departure
pointDistance
fromthe
frontier
inkm.ReturnpricesinDkr Topicalpetrol
costsbycar*
Sept.June1982
I98Ibyorganised bus
Sept.June
I98I 1982bytrain
Sept.June
I98I1982
Aalborg 27O 10 20 251282 297 340
Aarhus 175 10 15 191192 192 220
Odense 150 10 10 155160 I65 189
Fredericia 100 5 5105104 110 126
Vojens 50 10 10 5956 55 63
♦Based,onacarusing1litreofpetrol(5,50Dkr/1in
September 1981and6.30Dkr/linJune1982)per10km.
16,Alltheabovementioned transport pricesarethecostsofcrossingthe
German/DanishfrontierinJutlandwithouttakinga"boatorferiy.However,ev6nifa
ferryisinvolved ,theorganised day-trips arestillverycheap*Asanexample,
ashopping excursion fromCopenhagen toGermany-"busandferryincluded-atthe
endofJune1982cost19Dkrcomparedwith280Dkrbytrain.

-6-
PARTII-EVOLUTION IffTHEPERIOD :1JANUARY 1978-30JURE1962
17.Twofactorsdominate theevolution inthepricegapbetweenDanish
andGermanretailpricessincethebeginning ofthederogation period
inJanuary1978untilJune1932.First,thechangesinexchangeratesand
secondly ,thechangesinretailpricesinnational currency .
Evolution inexchange rates
18.On1January1978,"theexchangerateforDMvis-a-visDkrwas:
1U0DM=2/2Dkr.Sincethenanumberoi'realignments havetakenplace.
Realignments ofDMandDicr:
DM Dkr
16.10.1978 - -4
24.9.1979 +2% -3%
30.11.1979 - -5%
4.10.1981 +5,51°
22.2.1982 - -3%
11.6.1982 +4,25%
On1July1982,theexchangerateDM/'Dkrwas100DM=346Dkr.Duringthe
4#years,therefore ,theDanishCrownhasweakened bymorethan21'/ovis-a-vis
theGermanmark.Withunchanged retailpricesduringtheperiod,these
realignments ofthetwocurrencies wouldhavereducedthepricegaps
substantially .
Brolution ofretailpricesir.Denmark andGermany
19.Turning nowtotheevolution ofretailpricesoftheproducts under
report,thesehaveofcoursechangedconsiderably duringthe4'^-year
period,partlyinresponse togeneralincreases inconsumerprices (the
consumer priceindexinDenmarkduringthisperiodroseby55in
•/.

-ï-
Germany "by2cj)i>)and.partlyinresponse tochangesinexciseratesinthetwo
countries .
20.InTable3,theretailpricesinJune19&2oftheproductsdealtwith
inthisreportarecompared withtheearliest knownpricestakenfromearlier
reports.i''ortwoproducts-cigarsandcigarillos -nopricescomparable to
theJunepricesareavailable .Acommentary ontheevolution ofrelative
pricesoftheproducts showninthetableappearsbelow.
Tobaccoproducts_
21.Whenthederogation periodstarted ,thepricediiferencesinDenmark
andGermanyfortobaccoproducts otherthancigarettes ,wereingeneralsmall
andhaveremained sosince.Butthepricedifference betweenDanishandGerman
cigarettes wassubstantial -about40Table3showsthatthisdifference
hadbeencutinhalfbyJune19&2,toabout20%(However,ifaccountistaken
ofthetaxincrease dueon15December 19b2-seeparagraph (-theprice
advantage toaDaneofbuyingcigarettes inGermanywillrisetoabout28(,'o.
Inabsolute terms,thesavingon300cigarettes -about'62Dkr-willbe
almostexactlywhatitwaswhenthederogation began.Moreover ,theproposed
indexation ofspirits,beerandtobaccoexcisesin19^3islikelyto
re-commence adivergent trendintherelative pricesofalltheseproducts .

-10-
TABLE3
Evolution ortheretailpricesoftypicaltobaccoproducts andalcoholic
drinksinDenmarkandGermany,1January 19'I'd-end-June1962
PRODUCTSDate Danish
price
inDkrGermanprice
in
Dkr*MDiff.
in
Dkr.
UM2)(4)as
#of
(1)
(1)(2)(3)(4)
Cigarettes (300)Danish
brand
Change1977–1982
Estimate15.12.1982 l)Sept.1977
JuneI982204,00
259,50
27,2$
289,50121,50
207,60
70,9#
207,6045,00
60,00
33,3#
60,0082,50
51,90-37,1#
81,9040,4#
20,0#-20,4#
28,3#
Smokingtobacco ,50g
ChangeI978-I982Sept.1978
June19828,00
9,25
15,6%7,48
24,22
224%2,70
7,00
159%0,52
-14,976,5#
I62/'">
Cigars June1982 3,002,630,760,3712,3$
Cigarillos June1982 1,701,380,400,3218,8#
Cognac***,70cl
Change1977-1982Sept.1977
June1982155,75
211,00
35,5$59,19
89,61
51,4#21,92
25,90
18,2$96,56
121,39
25,7#62,0#
57,5#-4,5#
Whisky(5years)70cl
ChangeI978-I982Sept.1978
June1982132,00
126,50-4,2#47,06
69,20
47,0#16,99
20,00
17,7#84,94
57,30-32,5#64,3#
45,3#-19,0#
Gin.70cl
ChangeI978-I982Sept.1978
June1982125,00
129,95
4,0#43,18
65,39
51,4#15,59
18,90
21,2#81,82
64,56-21,1#65,5
49,7#-15,8#
Aquavit,70cl(Danish)Sept.197878,0049,8317,9928,17 36,1#
ChangeI978-I982June198298,35
26,1#82,69
65,9#23,90
32,9#15,66-44,4#15'9Vo-20,2#
BeerPilsen 6bottles ofSept.197919,3011,503,987,8040,4#
0,331(Danishbeer)
Change1979-1982
tístimate15.12.1982 l)June198222,80
18,1#
25,2020,59
79,0#
20,595'95,49,5#
5,952,21-71,7#
4,619,7#-30,7#
10,3$
*Exchange rateused:
end-September 1977i100DM■=270Dkr
""1978:100DM-277Dkr
""1979:100DM-289Dkr
"June 1982:100DM=346Dkr
1)Takingaccountoftheincreasesinratesdue15December1982-seeparagraph '(,

22.Itisalsoofinterest tocomparetheevolution oftherelative
pricedifferences "betweenDanishandGermancigarettes withthoseobtaining
betweencigarettes soldinotherMemberStates.
23.Table4belowgivesinECUtheretailpricesofthemostpopular
pricecategories ofcigarettes soldintheMemberStatesat1.1.1978 and
1.7.1982 .
TABLE4
RetailpriceinECUofmostpopularpricecategory mMemberStates
Retailpriceper20cigarettes inAmountsaved,byaGerman
SCU1^at
1.1.1978UCU^at
30.7.19Ö2traveller (Dprice-
priceinneighbouring State)
1.1.1978 30.6.1982
Β 0,794 0,815 0,231 0,794
DK 1,916 2,lló -0,870 -0,507
υκ3) - 2,361- -0,752
D 1,046 1,609 0 0
? 0,347 0,500 0,699 1,029
GR U.A. 0,481- -
IRL 0,6(1 1,502- -
IT 0,40/ 0,67b- -
L 0,550 0,635 0,490 0,974
NL 0,647 0,996 0,399 0,613
UK 0,859 1,806- -
1)iixchangerate2.1.1978
2)ïïxehangerate30.6.1982
3)Estimated DKpriceat15.12.1982-seeparagraph 7.

-12-
24.Ithas ofcourse tobestressed that thetype andquality ofthemost
popular cigarette price category inoneMember State canbevery different
from those inanother Member State .Normal travellers ,therefore ,are
unlikely tobuy ■themost popular foreign price category .But formany travellers
with regular andrelatively easy access toboth markets ,thechoice maywell
bedetermined byprice .
25.These comments apart ,Table 4shows that in197& theabsolute price
difference between themost popular Danish andGerman cigarettes wasthebiggest
between twoneighbouring States within theCommunity ,notwithstanding the
fact that thetypes ofcigarette sold inthe twocountries are similar .The
second highest differences was then between Germany andFrance .Following
thelatest German excise increase (seeparagraph b)theprice difference between
Gennan andDanish cigarettes isnow less than theprice difference between
German cigarettes andcigarettes from any oneofGermany 'sfour other
neighbouring Member States .AGerman traveller buying cigarettes inanyof
Germany 'sneighbours within theCommunity ,other than Denmark ,will therefore
make agreater saving than aDanish traveller buying cigarettes inGermany .
Spints
26.Atthebeginning ofthederogation period ,Denmark had oneexcise rate
foraquavit and ahigher oneforother spirits products .Atthat time ,the
price ofaquavit was about 50iJmore inDenmark than inGermany ,whereas the
price forother spirits wasabout 3times higher inDenmark than inGermany
(seeTable 3).TheEuropean Court ofJustice condemned this two-tier system
andtheDanish Government then introduced amixed excise ,containing both
aspecific andanadvalorem element .For aquavit ,this meant asmall price
increase andforthemajority ofspirits other than aquavit ,varying
reductions inprice .But forcognac andother expensive spirits ,theprice
went up.
•/•
1)Decision 171/78,27February I98O

-13-
27.InJune19^2,theretailpriceofproductslikeaquavit and.cognacwere
about30";ahigherthanatthebeginning ofthederogation period,whereasthe
pricesofothernormalqualityspiritsweremoreorlessthesame.Thisis
mostlyduetothemixedexcisesystem.Thepricegapforaquavitisnowas
lowas16forginandwhiskyoftheorderof45–50%andforcognac,about
57%
28.Itshouldbementioned herethattheretailpriceofcognacinDenmark,
exclusive ofalltaxes,isabout60/ohigier •fianthecorresponding pricein
Germany.Anexplanation ofthismigjitbethatthetotalsaleofcognacin
Denmarkissomodestthatthedistribution marginhastobemuchhigherin
DenmarkthaninGermany.Theintroduction ofasinglespecific exciserate,
leviedperhectolitre ofpurealcohol (aslongproposed bytheCommission
insteadoftheexisting mixedexcise,withthespecificrateequaltothe
averagedutyunderthemixedsystem,wouldsubstantially reducetheprice
gapforthemostexpensive spirits.
Beer
29.Inthe4'z"years,neithertheDanishnortheGermanexcisedutyonbeer
hasbeenchanged.AscanbeseeninTable3,theearliest comparable retail
pricesforbeerdatefromSeptember 1979^Atthattimethepricegapwas
40%.InJune19&2,thepricegaphadfallensharply,toabout10fo.
30.FromSeptember 1979 "toJune1962,theconsumerpriceindexrosein
Germanyby17>andby33'/oinDenmark,whereastheretailpriceofDanish
beerinthesameperiodroseby50%infjermany/^a?Sa?>yinDenmark
(byDecember 19&2fwhentheDanishexcisehasbeenincreased ,thepricerise
willbeabout25%sinceSeptember 1979)-
•/•
1)O.J.No.C43,29April1972.

14-
Relative évolution oftaxes
jl.The evolution ofretail prices can "beaffected "bytemporary or
atypical fluctuations such asdiscount sales ,special offers andthe like .
Inorder toeliminate such disturbances ,earlier reports have included
acomparison of"total tax"oneach product category inthetwocountries .
32.Thebasic data are theexcise duty plus theVAT levied onthat rate .
The "total tax"thus determined inGermany for each product category hasbeen
converted from DMtoDkr onthebasis oftheaverage exchange rate applying
inthemonths referred toinTable 5below .Thetotal tax inGermany equals 100
ineach case .The figures shown inTable 53-re the total tax inDenmark as
apercentage ofthat inGermany .
Table S
Index forthe "total tax"inDenmark compared with Germany (Germany =100 )
Jan . Sept . Sept .Sept .Sept . June »June 1982
1978 1978 I979 1980 1981 1982 I
Cigarettes 221 218 255 240 231 153 . 194
Cognac ) )510 448 364 ' 4ô3
Whisky ^ 511 502 486^373 305 267 \339
Gin ( (371 327 285 I 362
Aquavit 333 327 316 315 271 234 1 298
Beer 833 8l8 792 750 739 670 > 853
I
100DM= 272Dkr 277Dkr 269Dkr 309,59 314Dkr 346Dkr' 272Dkr
Dkr '
33.Table 5shows that allthe "taxindices "have gone down ,both inrelation
toJanuary 1978 and inrelation toSeptember 1981 .Forallproducts ,the
"taxgaps"have been reduced ,andformost products ,considerably ,especially
inthe last 9months .

-Ie)-
34.The last column inTable 5shows howthesituation would have been ,if
theexchange rate between DMandDkrhadremained unchanged from January 1978
until June 1982 .Acomparison between this column andtheJanuary 1978 figures
show that all "taxindices ",other than that forbeer ,have been reduced during
theperiod under observation .This means that gaps between relative taxlevels
inDenmark andGermany during thederogation period have ,narrowed somewhat .
Transport costs inDenmark
35.InTable 6below thetransport costs inSeptember 1979arecompared
with thecosts inJune 1982 .During this period ,theprice ofpetrol went
upbyabout two-thirds andthetrain costs by28-65c/o,whereas thecosts of
excursion bus trips have fallen .
'l'able 6:Transport costs
Departure
pointDistance
from the
frontier
inkmReturn prices inDkr Typical petrol
costs bycar*
Sept . June
1979 1982byorganised bus
Sept . June
1979 1982bytrain
Sept .June
1979 1982
Aalborg 27O 25 20 202 2Ö2 205 340
Aarhus 175 20 15 I50 I92 133 220
Odense 150 15 10 lió 1Ó0 114 189
Fredericia 100 10 74 IO4 76 12Ó
Vojens 50 10 10 34 56 38 63
*Based onacarusing 1litre ofpetrol (3,8Dkr/1inSeptember 1979 and
6,30 Dkr/linJune 19&2 )per10km.
36.TheCommission hasdrawn attention inearlier reports totheproblem of
theunreal istically lowcosts forbuspassengers .In1978 ,theDanish /German
land-border wascrossed byabout 34.000 Danish and$.000 foreign buses ,but
in1961 this figure rose to51*000 and22.000 buses respectively .Intotal ,
tnis means anincrease inbus-crossings ofabout 70'h.

37.Thisrisingtrend,may"beslowed "byarecentamendment totheDanish
VATlegislation ,whichfrom1October1982,willmaketransport ofpassengers
inbuses-exceptbusesinregularservice-subjecttoVAT.TheCommission
hasnoinformation abouttheexpected impactofthischangeonthepriceof
busexcursions acrosstheborder.
Thesizeofthebordertraffic andtrade
38.Inthefirstfouryearsofthederogation period,thenumberoftravellers
comingfromGermanytoDenmark was:
Wayofcrossing Mr 1211 1980 1981
mio
Byferry 8,0 7,5 7,9 7,0
Land-border 23,0 22,7 22,2 20,9
Total 31,0 30,2 30,1 28,7
Source :Danish Government
Thisslowlyfallingtrendisconsistent withtheincreased costsoftransport
(inparticular thepetrolprice).
35.TheDanish"Institute forFrontier RegionResearch "hasstudiedthe
motorvehicle (carsandbuses)trafficovertheDanish/Germanlandborder.
Theresultofthisstudy-basedoninterviews withmorethan3000Danish
andGermancross-border travellers-waspublishedintheSpringof1982^.
Thenumberoftravellers coveredbythereportisabouthalfoftheabove-
mentioned totalfigures (noferrytravellers areincluded).
Thereportreachesthefollowing conclusions :
-morethanhalfofthepersonscrossing theborderareDanish;
-aboutone-fifth oftheDanishtravellers travelbybus;
-thenumberofDanishbus-travellers isgoingup,whereasthenumberof
car-travellers isfalling (probably asaresultofrisingpetrolprices);
-about92-96)uoftheDanishtravellers buyinGermany,whereasonly
about55-^5'poftheGermantravellers buyinDenmark;–––––– ./.
(1)"Bordertrade-awayofshopping anditsconsequences ":SusanneBygvraa.

-17-
-thetravellers normally "buygoods which arehighly taxed intheir home
country .Asanexample ,itcan "bementioned that 75%oftheDanish
travellers bought cigarettes ,55chbeer ,42 -/otable wine and 45>petrol
whereas Germans most often "bought diesel oilanddairy products .Prom
this ,itisclear that bynomeans alltravellers make full use oftheir
allowances ;
-25-35 "/*°ftheDanish travellers gotoGermany atleast once aweek ,
whereas 4^-55 oftheGerman travellers doso;
-alarge number ofLanes living close totheGerman border buytheir
total consumption ofcigarettes andother taxed goods inGermany ;
-abolition oftheDanish 40-hour rule (seeparagraph 5)would mean a
substantial increase intheDanish cross-border buying inthe short run
whereas thelong-run effects aredependent onanumber offactors (e.g.
future exchange rate changes ,Danish andGerman taxpolicies )
and aremore difficult topredict .
The report makes noestimate ofthe effects oftheborder trade onDanish
taxrevenue .Itdoes ,however ,provide arough estimate ofthe size ofthe
trade onboth sides oftheDanish /German border ,which suggests atrade
deficit ini?oj .forDenmark ,oftheorder of'(00million Dkr .

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CUXJULUSiUîio
I
40.Inthenine-month periodfromSeptember 19°1toJune19^2,substantial
reductions inthepricegapsbetweenretailpricesinGermanyandDenmark
havetakenplaceformoreorlessallproductsdealtwithinthisreport.
Inparticular ,theDanish/Germanpricegapforcigarettes isnowcomparable
to,orlessthanthatfoundbetweenotherneighbouring iieinberStates.A ■
furtherpositive elementistherecentimposition ofVATonbusexcursions ,
whichwilltendtomakesuchtripslessattractive .Formoreexpensive spirits
products ,thecontinuing largepricegapisattributable totheDanishmixed
specific/advaloremexcisesystem,incompounding theeffectsofthe
relatively higherDanishtaxlevelforspirits.
41.Asregardsthe4t-yearperiodfromend-1977toend-June 19^2,itisclear
thatthetaxlevelsinDenmarkandGermanyhavemovedsomewhatclosertogether .
Thecontinued weakening oftheDanishcrownrelative totheDMhasalsobeen
afactortendingtoreducethepriceadvantages forDanishtravellers making
purchases inGermany.Asaconsequence ,thepricegapsformostproducts
coveredbythisreporthavebeensubstantially reduced,bycomparison with
theend-1977situation .Ontheotherhand,asmentioned above,duelargely
tothemixedexciseonspirits,thepricegapformanyspirits-particularly
expensive spirits-remainssubstantial .Inaddition ,itisregrettable that
thefurtherincreases intheDanishexcises oncigarettes andbeer,duein
December ,willoffsettosomedegreetheprogress madeinreducing theprice
gapfortheseproducts inrecentmonthsandthattheseeffectswillbecompounded by
theindexation oftheexcises ontobacco,beerandspiritsin19^3.
42.Finally,ithastoberecognised that,notwithstanding therelaxations
introduced duringthederogation period,theallowances grantedtoshort-term
Danishtravellers arestillmuchmorerestricted (seeparagraph 5)thanthose
normally givenundertheCommunity provisions .Despitetheserestricted
allowances ,Danishcross-border trafficintheformofbus-
excursions ,isconsiderable andcontinually increasing (seeparagraph 36).
Itisdifficult ,therefore ,toavoidtheconclusion thatalargeproportion
ofthecross-border tripsoriginating inDenmarkcontinues tobemade
largelyinordertoavoidDanishtaxes.