COMMISSION OF THE EUROPEAN COMMUNITIES 
COM(94) 355 final 
Brussels, 03.10.1994 
94/0204 (CNS) 
Proposal for a 
COUNCIL DIRECTIVE 
on taxes other than turnover taxes which affect the consumption of 
manufactured tobacco 
consolidated text 
(presented by the Commission) 
EXPLANATORY MEMORANDUM 
1. In the context of a people's Europe, the Commission attaches great importance 
to simplifying and clarifying Community law so as to make it clearer and more 
accessible to the ordinary citizen, thus giving him new opportunities and the 
chance to make use of the specific rights it gives him. 
This aim cannot be achieved so long as numerous provisions which have been 
amended several times, often quite substantially, remain scattered; so that 
they must be sought partly in the original instrument and partly in later 
amending ones. Considerable research work, comparing many different 
instruments, is thus needed to identify the current rules. 
For this reason a consolidation of rules that have frequently been amended is 
essential if Community law is to be clear and transparent. 
2. By its decision of 1 April 1987 the Commission instructed its departments 
to produce a formal consolidated version of legislative instruments no 
later than after their tenth amendment, but made it clear that this was a 
minimum requirement, and that in the interests of clarity and of the ready 
comprehension of Community law, an effort should be made by each department 
to consolidate the instruments for which it is responsible at more frequent 
intervals. 
3. The attached proposal of the Commission of Council Directive on taxes other 
than turnover taxes which affect the consumption of manufactured tobacco, 
combining the following directives into a single text: 
Council Directive 72/464/EEC of 19 December 1972 on taxes other than 
turnover taxes which affect the consumption of manufactured tobacco (as 
amended 13 times) 
and 
Second Council Directive 79/32/EEC of 18 December 1978 on taxes other than 
turnover taxes which affect the consumption of manufactured tobacco, 
has been drafted in accordance with the fundamental principles agreed by 
Council, Parliament and the Commission in 1974; it aims at legislative 
consolidation: the existing Directives would be replaced by one new one, which 
would leave their substance untouched but would assemble them into a single 
text, with only the formal amendments required by the operation itself. 
4. As in the past the text supplied here is collated from the original Directives 
as published in the Official Journal; the use of photocopies means that any 
improvements to the wording are immediately identifiable. The old numbering 
of the Articles has been retained in the margin for ease of reference, the new 
numbering being entered above the Articles: Annex II contains a concordance 
table relating the old system of numbering to the new. In order to preserve 
the dates for transposai of all the Directives concerned, an Annex (Annex I, 
Part B) lists the deadline for implementation of each of the Directives now 
being repealed. 
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LIST OF DIRECTIVES 
1. Council Directive 72/464/EEC of 19 December 1972 on taxes other 
than turnover taxes which affect the consumption of manufactured 
tobacco. 
(OJ No L 303, 31.12.1972, p. 1) 
modified by Directives; 
74/318/EEC (OJ No L 180, 3.7.1974, p. 30) 
75/786/EEC (OJ No L 330, 24.12,1975, p. 51) 
76/911/EEC (OJ No L 354, 24.12.1976, p. 33) 
77/805/EEC (OJ No L 338, 28.12.1977, p. 22) 
80/369/EEC (OJ No L 90, 3.4.1980, p. 42) 
80/1275/EEC (OJ No L 375, 31.12.1980, p. 76) 
81/463/EEC (OJ No L 183, 4.7.1981, p. 32) 
82/2/EEC (OJ No L 5, 9.1.1982, p. 11) 
82/877/EEC (OJ No L 369, 29.12.1982, p. 36) 
84/217/EEC (OJ No L 104, 17.4.1984, p. 18) 
86/246/EEC (OJ No L 164, 20.6.1986, p. 26) 
92/78/EEC (OJ No L 316, 31.10.1992, p. 5) 
modified by; 
Acts of Accession of Spain and Portugal (OJ No L 302, 15.11.1985, 
p. 167 and 168) 
2. Council Directive 79/32/EEC; Second Council Directive of 18 
December 1978 on taxes other than turnover taxes which affect the 
consumption of manufactured tobacco. 
(OJ No L 10, 16.1.1979, p. 8) 
modified by Directives ; 
80/369/EEC (OJ No L 90, 3.4.1980, p. 42) 
92/78/EEC (OJ No L 316, 31.10.1992, p. 5) 
modified by; 
Acts of Accession of Spain and Portugal (OJ No L 302, 15.11.1985, 
p. 168). 
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Proposal for a 
COUNCIL DIRECTIVE 
on taxes other than turnover taxes which affect the consumption of manu­
factured tobacco 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European 
Community, and in particular Article 99 thereof. 
Having regard to the proposal from the Commission t 
Having regard to the opinion of the European Par­
liament (lli 
Having regard to the opinion of the Economic and Social 
Committee ( 2 ), 
1) Whereas Council Directive 72/464/EEC of 19 December 
1972.on taxes other than turnover taxes which affect 
the consumption of manufactured tobacco*3' and 
Council Directive 79/32/EEC, Second Council 
Directive of 18 December 1978 on taxes other than 
turnover taxes which affect the consumption of 
manufactured tobacco*** have been amended 
substantially and on a number of occasions; whereas for 
reasons of clarity and rationality the said 
Directives should be consolidated in a single text; 
(1) 
(2) 
(3) OJ No L 303, 31.12.1972, p. 1. Directive as last amended by Directive 
92/78/EEC (OJ No L 316, 31.10.1992, p. 5). 
(4) OJ No L 10, 16.1.1979, p. 
92/78/EEC. 8. Directive as last amended by Directive 
- 5 -
Whereas the objective of the Treaty is to estab­
lish an economic union within which there is 
healthy competition and whose characteristics 
are similar to those of a domestic market; 
and, as regards manufactured tobacco, achieve­
ment of this aim presupposes that the appli­
cation in the Member States of taxes affecting 
the consumption of products in this sector does 
not distort conditions of competition and does 
not impede their free movement within the 
Community; 
3) Whereas, as far as excise duties are concerned, 
harmonization of structures must, in particular, 
result in competition in the different 
categories of manufactured tobacco belonging 
to the same group not being distorted by the 
effects of the charging of the tax and, conse­
quently, in the opening of the national markets 
of the Member States; 
4) Whereas the structure of the excise duty on cigarettes 
must include, in addition to a specific component 
calculated per unit of the product, a proportional 
component based on the retail selling price, inclusive 
of all taxes ; whereas the turnover tax on cigarettes has 
the same effect as a proportional excise duty and this 
fact should be taken into account when the ratio 
between the specific component of the excise duty and the 
total tax burden is being established ; 
5) Whereas, as regards cigarettes, the above-
mentioned objective is best achieved by a 
system which provides for a degression in the 
incidence of the tax and whereas for this 
purpose, the tax imposed on these products 
should consist of a proportional excise duty 
combined with a specific excise duty, the amount 
of which is fixed by each Member State in 
accordance with Community criteria; 
6) Whereas the structures for excise duties on 
manufactured tobacco should be harmonized 
by stages; 
7' Whereas the imperative needs of competition 
imply a system of freely formed prices for all 
groups of manufactured tobacco; 
8) Whereas there are several types of manufactured 
tobacco, distinguished by their characteristics and by 
the way in which they are used ; 1. 72/464/EEC 
5. 72/464/EEC 
4. 77/805/EEC 
6. 72/464/EEC 
8. 72/464/EEC 
72/464/EEC 
79/32/EEC 
- 6 -
9) 
10) Whereas these different types of manufactured 
tobacco should be defined ; 
Whereas, for economic reasons, temporary derogations 
should be provided for certain Member States^ 79/32/EEC 
79/32/EEC 
11) Whereas 
—•-- - • >. *_~ a distinction needs to 
be made between fine-cut tobacco for the rolling of ciga­
rettes and other smoking tobacco ; 92/78/E.E: 
(adapted] 
12) Whereas — a 
manufacturer needs to be defined as a natural or legal 
person who actually prepares tobacco products and sets 
the maximum retail selling price for each of the Member 
States for which the products in question are to be 
released for consumption ; 92/78/EEC 
(adapted) 
13) Whereas a majority of Member States grant exemptions 
from excise duty or make refunds of excise duty in 
respect of certain types of manufactured tobacco depen­
ding on the use which is made of them, and whereas the 
exemptions or refunds for particular uses need to be 
specified in this Directive ; 7. 92/78/EEC 
14) Whereas rolls of tobacco capable of being smoked as they 
are after simple handling should also be deemed to be 
cigarettes for the purposes of uniform taxation of these 
products ; 
15) Whereas Germany should be authorized to tax rolls at 
least at the rate or amount applicable to fine-cut tobacco 
for the rolling of cigarettes until 31 December 1998 at the 
latest; 9. 
10. 92/78/EEC 
92/78/EEC 
16) Whereas this Directive must not affect the 
obligations of Member States concerning the 
deadlines for implementation of the Directives set 
out in Annex I, Part Br 
HAS ADOPTED THIS DIRECTIVE: 
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TITLE I 
General principles 
Article 1 
1. The structure of the excise duty to which 
the Member States subject manufactured tobacco 
shall be harmonized in several stages. 
2. This Directive lays down general principles 
for this harmonization, as well as the special 
criteria applicable during the stages of 
harmonization. 
3. The transition from one stage of harmon­
ization to the next shall be decided on by the 
Council on a proposal from the Commission, 
taking into account the effects produced during 
the stage in progress by the measures introduced 
by the Member States into their system of 
excise duties in order to comply with the 
provisions applicable during that stage. The 
transition from one stage to the next may 
be deferred especially if it is likely to involve 
disproportionate losses of revenue for a Member 
State. 
Article 2 
1. The following shall be considered to be 
manufactured tobacco: 
(a) cigarettes; 
(b) cigars and cigarillos; 
(c) smoking tobacco 
— fine-cut tobacco for the rolling of ciga­
rettes, 
— other smoking tobacco ; 72/464/EEC 
Article 3 
92/78/EEC 
defined in Articles 3 to 7. 79/32/EEC (adapted) 
Article 1, (1) 
2. The Council shall, on a proposal from 
the Commission, adopt the provisions necessary 
to determine the way in which manufactured 
tobacco should be defined and classified in 
groups. 72/464/EEC 
- 8 -
3- Notwithstanding existing Community provi­
sions, the definitions referred to in Articles 3 tc 7 
shall be without prejudice to the choice of system or 
the level of taxation which shall apply to the different 
groups of products referred to in these Articles. 79/32/EEC 
(adapted) 
Article 1 
Article 3 Article 2 
79/32/EEC 
The following shall be deemed to be cigars or ciga­
rillos if they can be smoked as they are : 
1. rolls of tobacco made entirely of natural tobacco ; 
2. rolls of tobacco with an outer wrapper of natural 
tobacco ; 
rolls of tobacco with an outer wrapper of the 
normal colour of a cigar, and a binder, of reconsti­
tuted tobacco, 
— where at least 60 % 
by weight of the tobacco particles are both wider 
and longer than 1-75 mm and where the wrapper 
is fitted in spiral form with an acute angle of at 
least 30° to the longitudinal axis of the cigar ; 
4. rolls of tobacco with an outer wrapper, of the 
normal colour of a cigar, of reconstituted tobacco, 
where the unit weight, not 
including filter or mouth-piece, is not less than 2-3 
g and if at least 60 % by weight of the tobacco 
particles are both wider and longer than 175 mm 
and the circumference over at least one third of the 
length is not less than 34 mm. 
Article 4 Article 3 
1. The following shall be deemed to be cigarettes : 
(a) rolls of tobacco capable of being smoked as they 
are and which are not cigars or cigarillos within the 
meaning of Article 3 ; 
(b) rolls of tobacco which, by simple non-industrial 
handling, are inserted into cigarette-paper tubes ; 
(c) rolls of tobacco which, by simple non-industrial 
handling, are wrapped in cigarette paper. 
Until 31 December 1998,-
Germany shall be authorized to tax the rolls of tobacco 
referred to in (b) at least at the rate or amount appli­
cable to fine-cut tobacco for the rolling of cigarettes. 92/78/EEC 
(adapted) 
- 9 -
2. A roll of tobacco referred to in paragraph 1 shall, 
for excise duty purposes, be considered as two ciga­
rettes where, excluding filter or mouthpiece, it is 
longer than 9 cm but not longer than 18 cm, as three 
cigarettes where, excluding filter or mouthpiece, it is 
longer than 18 cm but not longer than 27 cm, and so 79/32/EEC 
Article 5 
The following shall be deemed to be smoking 
tobacco : 
1. tobacco which has been cut or otherwise split, 
twisted or pressed into blocks and is capable of 
being smoked without further industrial 
processing ; 
2. tobacco refuse put up for retail sale which does not 
fall under Articles S' and 4 and which can be 
smoked. Article 4 
(adapted) 
Article 6 Article 4 (a) 
Smoking tobacco as defined in Article 5 in which 
more than 25 % by weight of the tobacco particles 
have a cut width of less than 1 millimetre shall be 
deemed to be fine-cut tobacco for the rolling of ciga­
rettes. Member States which do not apply this cut 
width of 1 millimetre on 1 January 1993 shall have 
until 31 December 1997 to comply with this provision. 
Member States may also deem smoking tobacco in 
which more than 25 % by weight of the tobacco 
particles have a cut width of more than 1 millimetre 
and which was sold or intended to be sold for the 
rolling of cigarettes to be fine-cut tobacco for the 
rolling of cigarettes. 92/78/EEC 
Article 7 
\. Products consisting in whole or in part of 
substances other than tobacco but otherwise 
conforming to the criteria Set out in Article 3 shall 
be treated as cigars and cigarillos provided they 
have respectively: 
— a wrapper of natural tobacco, 
— a wrapper and binder of tobacco, both of reconsti­
tuted tobacco. Article 7 
79/32/EEC 
(adapted) 
— a wrapper of reconstituted tobacco. 
- 10 -
2. Products consisting in whole or in part of 
substances other than tobacco but otherwise 
conforming to the criteria set Out in Article 4 Or 5 
shall be treated as cigarettes and smoking tobacco. 
Notwithstanding the first subparagraph, products 
containing no tobacco and used exclusively for 
medical purposes shall not be treated as manufactured 
tobacco. 79/32/EEC 
(adapted) 
Article 8 
-Cigarettes manufactured in the Commu­
nity and those imported from non-member countries 
shall be subject to â proportional excise 
duty calculated on the —=— — 
maximum retail selling price, including customs 
duties, and also to a specific excise duty cal­
culated per unit of the product. 
2. The rate of the proportional excise duty 
and the amount of the specific excise duty must 
be the same for all cigarettes. Article 4 
72/464/EEC 
92/78/EEC 
3. At the final stage of harmonization of struc­
tures, the same ratio shall be established for ciga­
rettes in all Member States between the specific 
excise duty and the sum of the proportional excise 
duty and the turnover tax, in such a way that the 
range of retail selling prices reflects fairly the 
difference in the manufacturers-' delivery prices. 77/805/EEC 
4. Where necessary, the excise duty on 
cigarettes may include a minimum tax com­
ponent, the ceiling for which shall be deter­
mined- for each stage by the Council on a 
proposal from the Commission. 72/464/EEC 
Article 9 
1. A natural or legal person established in 
the Community who converts tobacco into manu­
factured products prepared for retail sale shall 
be deemed to be a manufacturer. 
Manufacturers, or, where appropriate, their 
representatives or authorized-agents in the 
Community and importers of tobacco from non-
member countries shall be free to determine the 
maximum retail selling price for each of their 
products for each Member State for which the 
products in Question are to be released for consumption. 
The second paragraph may not, however, hinder 
implementation of national systems of legis­
lation regarding the control of price levels or 
the observance of imposed prices, provided that 
they are compatible with Community legislation. Article 5 
92/78/EEC 
- 11 -
2. In order to facilitate the levying 
-—of the excise duty, Member States may, 
for each group of manufactured tobacco, fix 
a scale of retail selling prices on condition that 
each scale has sufficient scope and variety to 
correspond in fact with the variety of Com­
munity products. Each scale shall be valid for 
all the products belonging to the group of 
manufactured tobacco which it concerns, with­
out distinction on the basis of quality, presenta­
tion, the origin of the products or of the 
materials used, the characteristics of the 
undertakings or of any other criterion. 
Article 10 
1. At the final stage at the latest the rules 
for collecting the excise duty shall be 
harmonized. 
During the preceding stages the excise duty 
shall, in principle, be collected by means of 
tax stamps. If they collect the excise duty by 
means of tax stamps, Member States shall 
be obliged to make these stamps available to 
manufacturers and dealers in other Member 
States. If they collect the excise duty by 
other means, Member States shall ensure 
that no obstacle, either administrative or 
technical, affects trade between Member 
States on that account. 
2. Importers and national manufacturers of 
manufactured tobacco shall be subject to the 
system set out in paragraph 1 as regards the 
detailed rules for levying and paying the excise 
duty. 
Article 11 
The following may be exempted from excise duty or 
excise duty already paid on them may be refunded : 
(a) denatured manufactured tobacco used for industrial 
or horticultural purposes ; 
(b) manufactured tobacco which is destroyed under 
administrative supervision ; 
(c) manufactured tobacco which is solely intended for 
scientific tests and for tests connected with product 
quality ; 
(d) manufactured tobacco which is re-worked by the 
producer. 72/464/EEC 
Article 6 
Article 6 (a) 
92/78/EEC 
Member States shall determine the conditions and 
formalities to which the abovementioned exemptions 
or refunds are subject. 
- 12 -
TITLE II 
Special provisions applicable during the first 
stage of harmonization 
Article 12 
1. Subject to Article 1 (4), the first stage of 
harmonization of the structures of the excise 
duty on manufactured tobacco shall cover a. 
period of 60 months from 1 July 1973. 
2. During the first stage of harmonization 
Articles 13 and 14 shall be applicable. 
Article 13 
1. The amount of the specific excise duty 
levied on cigarettes shall be established for the 
first time by reference to cigarettes in the most 
popular price category according to the data 
available on 1 January 1973. 
2. "Without prejudice to the solution to be 
finally adopted regarding the ratio between the 
specific component and the proportional com­
ponent, the amount referred to in paragraph 1 
may not be lower than 5% or higher than 75% of 
the aggregate amount of the proportional excise 
duty and the specific excise duty levied on these 
cigarettes. 
3. If the excise ctoty on the price category 
referred to in paragraph 1 is amended after 
1 January 1973, the amount of the specific 
excise duty shall be established by reference 
to the new tax burden on the cigarettes referred 
to in paragrqph 1. 
Article 14 
Notwithstanding Article 8(1), each Member State 
may exclude customs duties from the basis for 
calculating the proportional excise duty on 
cigarettes. 72/464/EEC 
Article 7 
77/805/EEC 
(adapted) 
Article 8 
Article 9 
(adapted) 
TITLE In 
Special provisions applicable during the second 
stage of harmonization 
Article 15 
I. The second stage of harmonization of the 
structures of the excise duty on manufactured tobacco 
shall run from I July 1978. 77/805/EEC 
(adapted) 
Article 10 (a) 
86/246/EEC 
2. During the second stage of harmonization 
Article 16 shall apply 77/805/EEC 
(adapted) 
- 13 -
Article 16 Article 10 (b) 
1. The amount of the specific excise duty on 
cigarettes shall be established bv reference to ciga­
rettes in the most popular priée category according 
to the information available at 1 January each 
year, beginning 1 January 1V7X 
2. The specific component of the excise duty 
may not be less than 5 % or more than 55 % of 
the amount of the total tax burden resulting from 
the aggregation of the proportional excise duty, 
the specific excise duty and the turnover tax levied 
on these cigarettes. 77/805/EEC 
3. If the excise duty or the turnover tax 
levied on the price category referred to in 
paragraph 1 >s amended —— -
after 1 January 1978, the amount of the specific 
excise duty shall be established by reference to the 
new total tax burden on the cigarettes referred to 
in paragraph 1. 
4. Notwithstanding Article 8 (1), each Member 
State may exclude customs duties from the basis 
for calculating the proportional excise duty on 
cigarettes. (adapted) 
5. Member States may levy a minimum excise duty 
on cigarettes and on fine-cut tobacco for the rolling of 
cigarettes, provided that this does not have the effect of 
raising the total tax to more than 90 % of the total tax 
on the most popular price category of cigarettes or the 
most popular price category of fine-cut tobacco for the 
rolling of cigarettes respectively. 92/78/EEC 
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TITLE IV 
Final provisions 
Article 17 
Where necessary, the Council shall, on a 
proposal from the Commission, adopt provi­
sions for the application of this Directive. 
Article 18 
Member States shall communicate 
to the Commission the text of the main 
provisions of national law which they adopt 
in the field covered by this Directive. 72/464/EEC 
(adapted) 
Article 19 
The Directives listed in Annex I, Part A are 
repealed, without prejudice to the obligations 
of the Member States concerning the time-limits 
for implementation set out in Annex I, Part B. 
References to the repealed Directives shall be 
construed as references to this Directive and 
Shall be read in accordance with the 
correlation table set out in Annex II. 
Article 20 
This Directive shall enter into force on the twentieth day 
following that of its publication in the Official Journal of 
the European Communities. 
Article 21 
This Directive is addressed to the Member States. 
Done at Brussels, For the Council 
The President 
- 15 -
ANNEX I 
PART A 
REPEALED DIRECTIVES 
(referred to in Article 19) 
1. Directive 72/464/EEC 
2. Directive 79/32/EEC 
and their successive amendments: 
Directive 74/318/EEC 
Directive 75/786/EEC 
Directive 76/911/EEC 
Directive 77/805/EEC 
Directive 80/369/EEC 
Directive 80/1275/EEC 
Directive 81/463/EEC 
Directive 82/2/EEC 
Directive 82/877/EEC 
Directive 84/217/EEC 
Directive 86/246/EEC 
Directive 92/78/EEC 
16 
PART B 
Di rective Time-limits for implementation 
- 72/464/EEC 
- 79/32/EEC 
- 74/318/EEC 
- 75/786/EEC 
- 76/911/EEC 
- 77/805/EEC 
- 80/369/EEC 
- 80/1275/EEC 
- 81/463/EEC 
- 82/2/EEC 
- 82/877/EEC 
- 84/217/EEC 
- 86/246/EEC 
- 92/78/EEC T.7.1973 
1.1.1980 (1) 
1.1.1986 
31.12.1992 
^ The United Kingdom and Ireland were allowed to postpone this 
time-limit until 31,12.1977. 
-17-
ANNEX II 
CORRELATION TABLE 
This Directive Directive 72/464/EEC Directive 79/32/EEC 
Title I 
Article 1, 
Article 1, 
Article 2, 
Article 2, 
Article 
Article 
Article 
Article 
Article 
Article 8 
Article 9 
Article 10 
Article 11 
Title II 
Article 12 
Article 13 
Article 14 
Title III 
Article 15 
Article 16 
Title IV 
Article 17 
Article 18 
Article 19 
Article 20 
Article 21 (1) and (2) 
(3) 
(1) and (2) 
(3) Title I 
Article 1, (1) and (2) 
Article 1, (4) 
Article 3, (1) and (2) 
Article 4 
Article 5 
Article 6 
Article 6 (a) 
Title II 
Article 7 
Article 8 
Article 9 
Title II (a) 
Article 10 (a) 
Article 10 (b) 
Title III 
Article 11 
Article 12, (2) Article 1, 
Article 1, 
Article 
Article 
Article 
Article 
Article (1) 
(2) 
(a) 
Article 13 Article 10 
ISSN 0254-1475 
COM (94) 355 final 
DOCUMENTS 
EN 09 03 
Catalogue number : CB-CO-94-368-EN-C 
ISBN 92-77-72120-0 
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