PROPOSAL FOR A COUNCIL DIRECTIVE ON THE HARMONIZATION OF THE STRUCTURES OF EXCISE DUTIES ON ALCOHOLIC BEVERAGES AND ON THE ALCOHOL CONTAINED IN OTHER PRODUCTS
Date: 1990-11-07
Institutions: European Commission
Subjects: alcohol, alcoholic beverage, excise duty, less-favoured agricultural area, tax exemption, tax harmonisation

COMMISSION OF THE EUROPEAN COMMUNITIES 

COM(90) 432 final 

Brussels,7 November  1990 

Proposal  for a 

COUNCIL PIRECTIVE 

on the harmonization of the structures of excise duties 

on alcoholic beverages and on the alcohol 

contained  in other  products 

(presented by the  Commission) 

SfiiH"" 

VfiM.-

EXPLANATORY  MEMORANDUM 

I.  INTRODUCTION 

1. In  the  context  of  its  programme  for  the 
achievement  of  the  internal  market  and  in 
particular  the  requirements  of Article  99  of  the 
EC  Treaty,  the  Commission  put  forward  in  1987  a 
proposal  for  common  rates  of  excise  duty  on 
alcoholic  drinks  and  the  alcohol  contained  in 
other  products(1).  In  the  light  of  subsequent 
reactions,  amendments  to  that  proposal  were  put 
forward  in  1989 (2)  with  the  intention  of  easing 
the process  of  adjustment  for  the  Member  States. 
As  a  measure  of  flexibility,  the  Commission 
proposed,  on  the  one  hand,  that  national  excise 
rates  should  be  brought  into  conformity  with 
prescribed minimum  rates by  31 December  1992 and, 
on  the  other  hand,  that  Member  States  with 
national  rates  in excess  of the  long term  target 
rates  (which the proposal  also put  forward) might 
decrease,  but  not  increase  their  national  rates. 
Similarly,  national  rates  inferior  to  the  target 
rates may only be moved towards those rates. Those 
requirements  represent  a  first  step  in  a  gradual 
alignment on the long term target rates, while at 
the same time constituting the approximation which 
is  indispensable  to  the  abolition  of  fiscal 
frontiers  by  the  31  December  1992  deadline  laid 
down by the Single European Act. 

2. However,  to  ensure  the  establishment 

and 
functioning  of  the  internal  market,  it  is  not 
sufficient  that  the  rates  of  indirect  taxation 
applied  in  the  Community  be  approximated.  The 
framework  within  which  these  taxes  are  charged 
must  also  be  identified,  and  a  common  structure 
laid  down  in  those  areas  where  continued 

(1) COMC87) 328 final, OJ C 250 18.9.1987. 
C2) COM (B9)'527 FINAL, oJ C 12 18.1.1990, P. 12. 

3 

differences  in national practices would  hinder or 
distort  the  free  movement  of  goods  after  the 
abolition of fiscal frontiers. 
This  does  not  entail  the  establishment  of  a 
completely  uniform  fiscal  system,  but  it  does 
require  a  sufficient  degree  of  coordination  to 
ensure  that  a  Europe  without  frontiers  does  not 
result in unacceptable distortions of competition. 
The necessary  provisions must, inter alia, ensure 
that as a general principle goods which are traded 
across  frontiers  are  not  exempt  in  one  Member 
State  but  taxable  in  another,  and  that  taxable 
goods fall within the same tax category throughout 
the  Community.  The  proposed  Directive  therefore 
seeks to ensure that the scope and nature of each 
duty  -  and  the  exemptions  from  it - are  clearly 
identified at the Community level. 

II. BACKGROUND 

1. The  present  proposal  has  its  origins  in  three 
proposals  which  date  from  1972  (COM(72)0225  2/4 
final)  and  one  proposal  which  dates  from  1985 
(COM(85)151  final),  all  four  of  which  the 
Commission intends to withdraw. 

The present proposal differs from the originals in 
the following respects: 

- all  provisions  concerning  the  warehousing  and 
circulation  of  goods  have  been  withdrawn  and 
dealt with in a directive covering this field on 
an across-the-board  basis  for all goods  subject 
to excise duty; 

- certain  provisions  which  it  is  considered  need 
not be harmonized for the purposes of the single 
market have been removed, and certain provisions 
which were considered  too vague to  fulfil  their 
necessary function have been clarified; 

4 

-all  provisions have been reviewed and updated in 
the  light  of  the  Commission's  proposal  to 
approximate  the  rates  of  duty  on  alcoholic 
beverages and on the alcohol  contained  in other 
products.  (COM(89)527 final) 

In  drafting  the  present  proposal  the  Commission 
has  set  out  to  designate  relatively  broad  and 
simple  tax  categories  which  take  account  of 
existing  practice.  At  the  same  time,  however,  it 
has also had regard to the particular difficulties 
which  this  field  presents,  given  the  wide 
diversity of treatment currently applied by Member 
States  not  only  to  the  different  categories  of 
alcoholic  drinks,  but  also  to  different  products 
within  those  categories.  The  Commission  has 
sought,  as  far  as  possible,  to  respect  that 
diversity  while  at  the  same  time  attempting  to 
ensure the coherent Community-wide  system which is 
in the long term interest of all concerned. 

provisions 

The  Commission  has  therefore  made  specific 
balanced 
presenting 
particular  problems,  the  existence  of  which  has 
been  recognized  and  catered  for  in  previous 
proposals, and where the normal operation of broad 
categorization causes specific difficulties. 

for  sectors 

Moreover,  it  is  accepted  that  further  instances 
may  occur  where  specific  difficulties  arise  in 
adapting  to  the  Community-wide  system.  The 
Commission's  approach  provides  both  a  rational 
framework  within  which  such  problems  may  be 
analysed  and  the  necessary  guidelines  for  the 
application of common solutions which preserve the 
coherence of the system. When examining  such cases 
it  is  important  to  bear  in  mind  certain  basic 
principles  which  the  Commission  has  respected  in 
its present  proposals  and  in  its  rates  proposal. 
Moreover,  for  reasons  of  clarity  and  legal 

certainty, any specific provision must have as its 
basis a definition agreed at Community level. 

5 

III. BRIEF  EXAMINATION  OF  THE  MAIN  FEATURES  OF  THE 

PROPOSAL 

1. Scope 

Articles  1 and  2  (beer) , 6 and  7  (still wine  and 
sparkling 
(intermediate 
10  and 
products),  14  and  15  (alcohol  and  alcoholic 
beverages). 

wine), 

11 

a) General remarks 

The  proposal  sets  out  to  tax  all  alcoholic 
drinks and all alcohol contained  in other goods 
unless a specific exemption has been provided. 
Such  a  system  is  essential  to  ensure both  the 
proper  functioning  of  the  internal  market  and 
good  management  at  the  national  level.  With 
that aim of comprehensive  coverage  in mind  and 
in  order  to  ensure  uniform  categorization  of 
identical products throughout the Community the 
proposal  sets  out  to  define  products  in  such 
manner  as  to  ensure  that  all  alcoholic  drinks 
fall  within  one  of  its  definitions  and  no 
alcoholic  drink  falls  within  more  than  one 
definition. The proposal therefore takes as its 
starting point the Combined Nomenclature, which 
represents 
comprehensive 
classification  of  alcoholic  beverages  at  the 
Community  level,  and  modifies  its  approach  to 
the  extent  necessary  to  meet  taxation  needs. 
Use  of  the  Combined  Nomenclature  also  ensures 
uniform  treatment  for  products  from  third 
countries. 

only 

the 

b) Articles 1 and 2;  Beer 

Article  1  requires  that  an  excise  duty  be 
charged  on  beer,  and  that  its  rate  shall  be 
fixed  in  accordance  with  the  requirements  of 
COM(89)527  final.  Article  2  defines  beer  by 
reference to CN 2203. 

There  are  beverages  on  the  market  which 
according  to  some  commercial  legislation  are 
not  regarded  as beer.  In order  not  to  distort 
the  conditions  of  competition,  however,  it  is 
advisable to subject these products to the same 
tax  system  as  is  applicable  to  beers  as  more 
narrowly  defined  for  other  purposes.  The 
definition of beer which appears  in CN 2203  is 
comprehensive,  covering  all  the  products 
concerned. 

c) Articles 6 and 7;  Wine 

Article  6  requires  that  an  excise  duty  be 
charged  on  wine  and  that  its  rates  shall  be 
fixed  in  accordance  with  the  requirements  of 
COM(89)527 final. 

Article 7(1) defines still wine as all products 
of  CN  2204,  2205  and  2206,  except  sparkling 
wine,  provided  that  they  have  an  alcoholic 
strength not exceeding 15% and that where their 
strength  exceeds  13%  they  contain  only 
fermented alcohol. Still wines corresponding to 
the  definition  of  annex  1,  paragraph  13, 
penultimate  subparagraph  of  regulation  822/87 
are  also  included.  CN  2204  covers  fermented 
unaromatized  grape  products,  CN  2205  covers 
fermented aromatized grape products and CN 2206 
covers  the  fermented  products  of  fruit  other 
than grapes. 

7 

The position  is therefore  similar  to  that  for 
beer,  as  outlined  above  in  that  some  of  the 
products  which  it  is  proposed  to  tax  as  wine 
are  not  necessarily  treated  as  wine  by  other 
legislation.  Nevertheless,  for  reasons  of 
competition it seems advisable to subject these 
products  to  the  same  tax  system  as  wines 
proper.  Hence  their  inclusion  within  the 
definition 

Article 7(2) defines sparkling wine not only as 
the product of CN 2204 10  (i.e. sparkling wines 
proper)  but  also  as  products  falling  within 
other  headings  covering  wine  presented  in 
bottles  with  "mushroom"  stoppers  etc.  and  the 
sparkling fruit wines of CN 2206 91. 

d) Articles 10 and 11; 

Intermediate products 

Article  10  requires that  a duty  be  charged  on 
intermediate  products  and  that  its  rate  be 
fixed  in  accordance  with  the  requirements  of 
COM(89)527 final. 

Article  11  defines  intermediate  products  as 
products  of  CN  2204,  2205  and  2206  with 
strengths  over  15% but  not  more  than  22%, or 
with  strengths  exceeding  13%  not  made  up 
entirely  of  fermented  alcohol;  table  wines 
meeting  the  definition  set s out  in  Annex  I 
paragraph  13,  penultimate  sub-paragraph  of 
Regulation  822/87(1)  are  specifically  excluded 
from the category. 

As  regards  these  products,  the  Commission 
retains  the  broad  approach  of  its  earlier 
proposal  (COM(85)151 final) where  it  explained 
that:  "between purely  fermented  beverages  such 
as  wine  and  fruit  wine  on  the  one  side,  and 
purely  distilled  alcoholic  beverages  such  as 

(1) UJ NU JL 84 UF  2). 3.1987 P. 44. 

8 

an 

with 

products" 

spirits on the other, there  is a wide range of 
"intermediate 
actual 
alcoholic  strength  typically  situated  between 
15%  and  22% by  volume. Most  of these  products 
are based  on a naturally  fermented  beverage to 
which  alcohol  and  in  some  cases,  other 
ingredients  have  been  added:  they  retain 
however the taste and other characteristics  of 
naturally  fermented  beverages.  It  is  the 
intention  that  this  directive  should  include 
such  products,  whereas  those  which  have  more 
the  characteristics  of  a  spirit  should  be 
excluded  from  the  scope  and  be  taxed  on  the 
basis  of  their  alcohol  content,  at  the  full 
rate for alcohol". 

In  recent' years  products  have  been  developed 
which,  although  their  strengths  do  not  reach 
15%,  are  mixtures  of  spirits  and  fermented 
products  which  can  withstand  opening  to  the 
air, and which are  in all respects  practically 
indistinguishable 
strength 
from 
intermediate  products.  It  seems  proper  to  tax 
such drinks at the intermediate products rate. 

higher 

The definition  now proposed  therefore  includes 
such  drinks,  and  is  generally  designed  to 
provide a clear tax category for this extremely 
complex range of products. 

e) Articles 14 and 15; 

Alcohol  and  alcoholic 

beverages 

Article  14  requires  that  a  duty  shall  be 
charged  on alcohol  and  alcoholic  beverages and 
that its rate shall be fixed in accordance with 
the requirements of COM(89) 527 final. 

Article  15  defines  alcohol  and  alcoholic 
beverages  as  all  products  falling  within  CN 
codes  2207  and  2208,  together  with  those 
products of CN codes 2204, 2205 and  2206 which 

9 

have  an  actual  alcoholic  strength  exceeding 
22%.  See  also  the  note  under  Article  18 
(Section  F  -  Common  Provisions)  below  as 
regards  the  taxation  of  alcohol  and  alcoholic 
drinks contained  in other products. 

Article  15,  therefore,  simply  rounds  off  the 
comprehensive  Combined  Nomenclature  based 
approach. 

2. Establishment of the duties 

a) details of charge 

Articles  3,  8,  12  and  16  of  the  proposal  are 
technical  articles  fixing  the  charges  of  the 
duties. 

b) small breweries 

by 

small 

produced 

Articles  4(1)  and  (2)  of  the  proposal  permit 
Member States to apply a lower rate of duty to 
beer 
independent 
undertakings.  The  relief  is  in  line  with 
existing  practice  in  certain  Member  States. A 
maximum  duty  differential  is  imposed  which  is 
designed  to  ensure  that  the  benefit  of  the 
lower  rate  does  not  distort  competition 
unacceptably,  and  a  maximum  annual  output  of 
60,000  hi  is  laid  down, which  is  designed  to 
ensure that the reduced rate does not give rise 
to  relief  beyond  the  threshold  of  the  genuine 
independent  small  business  and  does  not,  in 
principle, affect  intra-Community movements  of 
beer. It is further provided that the Community 
minimum rate must in any event be respected. 

c) "Home" brewing and wine making 

Article 4(3)  permits  Member  States  to  exempt 
"home  brewing"  and  Article 9  permits  them  to 
exempt  "home  wine-making"  from  excise  duty. 
Member  States  attitudes towards these 

practices 

10 

vary  widely.  Without  going  further  into  the 

matter, however,  where  there  is  no  real  danger 

of the product concerned  crossing  frontiers, it 

seems  clear  that  the  advent  of  the  single 

market  should  not affect the existing  rights  of 

citizens to make and consume their  own drinks. 

d) spoilt  beer 

Article  5  provides  for  relief  from  duty  for 

beer  which  has  been  returned  because  it  has 

passed  its  "sell  by"  date  or  is  otherwise 

unmerchantable.  Beer  is  particularly  liable  to 

spoil  and  is  normally  produced  for  consumption 

within  a  very  short  period.  It  is  therefore 

usual  to  make  special  provision  for  the 

repayment  of  duty  on  spoilt  beer,  and  the 

Commission  proposal  makes  it  clear  that  such 

provisions are entirely  lawful. 

e) low strength  fermented  drinks 

Article  8(3)  permits  Member  States  to  apply  a 

single reduced  rate of duty to products  of  less 

than  normal  wine  strength.  The  provision 

broadly  reflects  the  existing  general  practice 

in  the  Member  States  mainly  concerned.  A 

maximum  duty  differential  is  imposed  which  is 

less than  is generally  currently  granted  and  is 

designed  to  ensure  that  the  benefit  of  the 

lower 

rate 

does 

not 

serve 

competition 

unacceptably. 

It 

to 

is 

distort 

further 

provided  that the Community minmum  rate must  in 

any event be  respected. 

f) natural  sweet  wines 

Article  12(3)  allows  Member  States  to  apply  a 
single  reduced  rate  of  duty  to  "natural  sweet 
wines"  as  defined  in  Article  13(1)  of  Council 
Regulation  4252/88C1).  The  specific  situation 

(1) UJ MU L 373 UF 31.12.1988, P. 59. 

11 

of  these  products  was  recognized  in  the 
Commission's  1985  proposal  on  Intermediate 
Products and the current provision permits all 
Member  States  to apply  a reduced  rate to  such 
goods. A maximum duty differential  is imposed, 
which  is  less  than  is  currently  granted,  and 
which is designed to ensure that the benefit of 
the  lower  rate  does  not  distort  competition 
unacceptably.  It  is  further  provided  that  the 
Community  minimum  rate  must  in  any  event  be 
respected. 

3. Control 

Article  13  provides  that  intermediate  products 
shall be manufactured  in warehouse  from  duty-free 
materials. Matters of control  are generally  dealt 
with  in  a  separate  proposal  for  a  directive. 
However,  in  the  case  of  intermediate  products  -
which  are  essentially  mixtures  of  two  drinks 
taxable  at  different  rates,  but  for  which  a 
separate rate has been specifically  provided  - it 
seems  necessary  to  ensure  at  the  outset  by  a 
common  provision  that  the  intended  rate  is 
charged. 

4. Exemptions 

Article  17  provides  for  the  exemptions  to  the 
various  duties  established  by  the  proposal.  In 
practice  the  exemptions  largely  concern  the 
spirits  duty.  However,  where  applicable - and 
should the contingency ever arise - the exemptions 
are  intended  to apply  to all  duties. Most  of  the 
exemptions are self-explanatory, but some comments 
are required: 

- Article  17(1)(a) exempts drinks with an alcohol 
content  not  exceeding  1.2%.  Member  States 
generally  apply  some  such  exemption,  but  there 
is no agreement on  its precise  limitations. The 
proposal  opts  for an across-the-board  exemption 

12 

for  reasons  of  competition.  The  1.2%  cut  off 
point  is  chosen  because,  on  the  one  hand  this 
strength  is sufficiently  low to  justify  special 
treatment,  and  on  the  other  hand  it  is  not  so 
low as to result  in products totally  lacking  in 
all the characteristics of alcoholic drinks. 

Article  17(1)(b)  and  (c) together  with  Article 
17(3) exempt both "completely denatured" alcohol 
(for  general  use  in  industry  etc.)  and  other 
denatured alcohol for use in perfumes toiletries 
and  cosmetics  or  for  external  medical  use. 
Member States generally demand much more noxious 
dénaturants  for  alcohol  for  general  industrial 
purposes  than  they  demand  for  alcohol  used  for 
the particular purposes set out at sub-paragraph 
1(c). The proposal respects that distinction. 

Although  the  ideal  system  of  denaturing  might 
well  involve  the  Community-wide  application  of 
common  rules,  so  that  further  action  in  this 
field  cannot  be  excluded,  it  has  not  been 
considered  necessary  to  set  up  common  rules  at 
the  present  stage.  The  proposal  therefore 
requires  mutual  recognition  of  denaturing 
formulae and  sets up at Article  17(3),  a system 
for  the  mutual  exchange  of  the  necessary 
information. 

and 

the 

from  duty 
representations 

for  deliveries  to 
Exemptions 
diplomatic 
like 
(international organizations, armed forces etc.) 
are  dealt  with  in  the  proposal  on  common 
provisions  for all  exciseable  products  (COM(90) 
. . . ).  Exemption  for ships' stores  and the like, 
in 
international 
transport,  will  be  dealt  with  in  a  separate 
directive. 

particular 

regards 

as 

5. Common  Provisions 

13 

Article  18  requires  alcohol  and  alcoholic  drinks 
present  in  other  products  to  be  taxed  on  the 
quantity  present  at  the  rate  appropriate  to  the 
alcohol or alcoholic drink concerned. 

6. Final Provisions 

Article  19  makes  reference  to  the  provisions 
providing  for  the  establishment  of  an  Excise 
Committee  in the horizontal directive proposal. 

Article  20  sets  a deadline  for  implementation  of 
the  proposed  Directive  and  communication  to  the 
Commission of the relevant national provisions. 

Article 21 formally addresses the Directive to the 
Member States. 

- 14 -

Proposal  for a 

COUNCIL  DIRECTIVE 

on the harmonization  of  the  structures  of  excise  duties 

on alcoholic  beverages  and on the  alcohol 

contained  in other  products 

THE COUNCIL OF THE EUROPEAN  COMMUNITIES, 

Having  regard  to  the  Treaty  establishing  the  European 

Economic  Community,  and  in particular Article  99 thereof, 

Having  regard to the proposal  from the  Commission, 

Having  regard  to  the  opinion  of  the  European  Parliament 
(1) 

Having  regard  to  the  opinion  of  the  Economic  and  Social 
Committee (2) 

Whereas  Council  Directive 

(3) lays  down 
minimum  and  target  rates  of  excise  duty  to  be  applied  in 

the Member  States  to  alcohol, wine, beer  and  intermediate 

products ; 

Whereas  it  is necessary, if  those  duties  are  to  be  applied 

in  a  uniform  manner, to  determine  common  definitions  for 

all the products  concerned; 

Whereas  it is useful  to base  such definitions  on those  set 

out  in  the  Combined  Nomenclature  which  represents  an 

established  comprehensive  system  providing  a  suitable 

basis  for taxation purposes; 

Whereas  it  is necessary  to  ensure  that  duty  is  charged  on 

actual  quantities delivered  or certified  missing; 

(1) ... 
(2) ... 
(3) ... 

- 15 -

Whereas,in the case of beer, the system of taxing the worts 
causes  great  difficulties  in  assessing  the  charge  and  is 
susceptible  of distorting  competition  between  breweries,  so 
that  it  is  necessary  to  ensure  that  the  tax  is  applied 
throughout  the  Community  to  the  actual  quantity  of  end 
product which leaves the brewery; 

Whereas, 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; 

Whereas, in the case of beer, a common  solution  is required 
permitting  Member  States  to  apply  a reduced  rate  of  duty 
to  the  products  of  independent  small  undertakings, 
provided  that  such  a  reduced  rate  should  not  serve  to 
distort competition within the internal market; 

Whereas, in  the  case  of  beer  and  wine, it  is  advisable  to 
permit  Member  States  to  exempt  from  duty  home-made 
products which are not produced  for commercial purposes; 

Whereas,  in  view  of  beer's  short  life  span  and  its 
propensity  to  spoil,  it  is  necessary  to  permit  Member 
States  to  refund  duty  on  beer  destroyed  as  unfit  for 
consumption; 

Whereas  it  is  advisable  to  permit  Member  States  on  a 
common basis to apply,  on the one hand,  a reduced  rate of 
duty  to  ciders  and  similar  products  of  less  than  normal 
wine strength  (n.e. 8.5%)  and, on the other hand, to apply 
a  reduced  rate  of  the  intermediate  products  duty  to 
natural  sweet  wines,  provided  that  such  reduced  rates 
should  not  serve  to  distort  competition  within  the 
internal market; 

Whereas  in the  internal  market  it  is necessary  to  ensure 
that  intermediate  products  are  taxed  in  their  final  form 

-16-

at  the  rates  provided  for in the case of such prodxts, and not at the 
rates  applicable  to  their  constituent  materials  prior  to 
their manufacture, so that it is necessary to require that 
intermediate  products  be  manufactured  in  warehouses 
from 
duty-free constituent materials; 

Whereas it is necessary to lay down precisely at Community 
level the exemptions  which apply to all goods which  cross 
frontiers; 

Whereas,  however,  it  is possible  to  permit  Member  States 
to  apply  their  own  conditions  to  exemptions  tied  to  end 
uses within the territory of the State; 

Whereas  it  is necessary  to tax  the  alcohol  and  alcoholic 
drink present in other products on the quantity of alcohol 
present  and  at  the  rate  appropriate  to  the  alcohol  or 
alcoholic drink concerned; 

HAS ADOPTED THIS DIRECTIVE: 

SECTION A - BEER 

I.  SCOPE 

- 17 -

Article 1 

1. Member  States  shall  apply  an  excise  duty  to  beer 
in  accordance  with  the  provisions  of  this 
Directive. 

2. Member  States  shall  fix their  rates  in  accordance 

with  Directive [C0ft(89) 527 final"].. 

Article 2 

For  the  purposes  of  this  Directive  the  term  "beer" 
covers any product falling within CN code 2203. 

- 18 -

II.  ESTABLISHMENT OF THE DUTY 

Article 3 

1. The excise duty  levied  by Member  States  on  beer 
shall  be  fixed  by  reference  to  the  number  of 
hectolitre/degrees Plato of  finished  product  released 
for  consumption  or  recorded  as  missing  and 
exceeding  any allowance granted.  In assessing  the 
charge  to  duty  on  beer  in  accordance  with  the 
requirements  of  Directive  [(COM(89) 527 final)], 

Member States shall ignore fractions of a degree Plato. 

2. Member  States  may  divide  beers  into  categories 
consisting  of  no  more  than  4  degrees  Plato  and 
charge the same rate of duty per hectolitre on all 
beers  falling  within  each  category.  Such  rates, 
expressed  as  a  charge  per  hi/degree  Plato  shall 
invariably  equal  or  exceed  the minimum  rate  laid 
down  in  Article  [7a] of Directive [(C0M(89) 527 final)] 

Article 4 

1. Member  States  may  apply  a single  reduced  rate  of 
excise  duty  to  beer  brewed  by  independent  small 
undertakings within the following limits: 
- the  reduced  rate  shall  not  be  applied  to 
undertakings  producing  more  than  60.000  hi  of 
beer per year; 

- the reduced  rate shall not be set more than 20% 
below the standard national rate of excise duty; 
- the reduced  rate shall not  fall below the  level 
of the minimum  rate  laid  down  in Article  [7a] 
of Directive  [(C0M(89) 527 final)]. 

2. Member  States  shall  ensure  that  any  reduced  rate 
they  may  introduce  applies  equally  and  in  a 
straightforward  manner  to  beer  delivered  into 

- 19 -

their  territory  from  independent  small  breweries 
situated in other Member States. 

3. Subject to such conditions as they  shall  lay down 
to  ensure  the  straightforward  application  of  the 
exemption,  Member  States  may  exempt  from  excise 
duty  beer  produced  by  a  private  individual  and 
consumed  by  the  producer,  members  of  his  family 
living  under  his  roof,  his  employees  or  his 
guests. 

Article 5 

from 

t he 
c o n d i t i on  or  age 
in 

i ts 
f or  consumption  may  be  refunded 
the  conditions  and  procedures  laid  down 

The  e x c i se  duty  paid  on  beer  withdrawn 
market  and  d e s t r o y ed  because 
renders 
it  u n f it 
accordance  w i th 
by  Member  S t a t e s.  Each  Member  S t a te  s h a ll  e n s u re  t h at 
those  conditions  and  procedures  shall  apply  equally  to  both  beer 
produced  within  the  Member  State  and  beer  delivered  into 
territory  from  other  Member  States. 

i ts 

SECTION B - WINE 

I.  SCOPE 

Article 6 

1. Member  States  shall  apply  an excise  duty  to  wine 
in  accordance  with  the  provisions  of  this 
Directive. 

2. Member States shall  fix their rates  in accordance 

with  Directive /."(COM(89) 527 final)./. 

- 20 -

Article 7 

For the purpose of this Directive: 

1. The term  "still wine" covers all products  falling 
within  CN  codes  2204,  2205  and  2206,  except 
sparkling wine  as defined  in  point  2  of  this 
Article,  provided that the products have an actual 
alcoholic strength by volume not  exceeding 15% vol and 
that  the  alcohol  contained  in  products  of  an 
actual alcoholic strength by volume  exceeding 13% vol 
is  entirely  of  fermented  origin.  Also  to  be 
considered still wines are products  between 15 and 17% 

vol which meet the definition set out in Annex I, point 13, 

(1 ) 

penultimate subparagraph of Council Regulation (EEC) No 822/87 

2. The  term  "sparkling  wine"  covers  all  products 
falling withiN CN codes 2204  10, 2204 21 10, 2204 
29  10  and  2206  00  91  provided  that  the  products 
have  an  actual  alcoholic  strength  by  volume  not 
exceeding 15% vol  and  that  the  alcohol  contained  in 
products of an actual alcoholic strength by volume 
exceeding 13% vol is entirely of fermented origin. 

II.  ESTABLISHMENT OF THE DUTY 

Article 8 

1. The  excise duty levied by Member States on still 
and on sparkling wine shall be  fixed by  reference 
to the  number  of  hectolitres  of  finished  product 
released  for  consumption  or  recorded  as  missing 
and exceeding any allowance granted. 

2. Except 

as 

provided 

in  paragraph  3, 

Member  States  shall  levy  the  same  rate of  excise 
duty  on  all products  chargeable with  the duty  on 
still  wine.  Similarly  they  shall  levy  the  same 
rate of  duty  on  all products  chargeable with  the 
duty on sparkling wine. 

(1) 0J No L 84, 27.3.1987, p. 1. 

- 21 -

single 

Subject to the following conditions, Member States 
may  apply  a 
duty on  still wines  and  a  single  reduced  rate  of 
duty on sparkling wines restricted  in  each  case 
to  products  which  have  an  actual  alcoholic 
strength by volume not exceeding 8.5% vol, 

rate  of 

reduced 

- the reduced  rate shall not be set more than 50% 

below the standard national  rate of excise duty; 

- the reduced  rate shall not fall below the  level 
of  the  minimum  rate  laid down in Article /6a/ of 

-, Directive MC0M(89) 527 final)"/. 

Article 9 

Subject to such conditions as they  shall  lay down to 
ensure  the  straightforward  application  of  this 
provision,  Member  States  may  wholly  or  partially 
exempt  from  excise  duty  wine  produced  by  a  private 
individual, or  by  a production  undertaking  from  its 
own agricultural produce, and in  each  case consumed 
by the  producer, members  of his  family  living  under 
his roof, his employees or his guests. 

SECTION C - INTERMEDIATE  PRODUCTS 

I.  SCOPE 

Article 10 

1. Member  States  shall  apply  an  excise  duty  to 
intermediate  products  in  accordance  with  the 
provisions of this Directive. 

2. Member States shall  fix their rates  in accordance 

with  Directive /J(C0M(89) 527 final)?. 

- 22 -

Article 11 

1. Except as provided at paragraph 2 of this Article, 
for  the  purposes  of  this  Directive  the  term 
"intermediate  products"  covers  all  products 
falling within CN codes 2204, 2205 and  2206 which 
have  an  actual  alcoholic  strength  by  volume 
exceeding 15% vol  but  not  exceeding  22% vol, or which 
have  an  actual  alcoholic  strength  by  volume 
exceeding 13% vol and  in which the alcohol content  is 
not entirely of fermented origin. 

2. The term "intermediate products" shall not include 
products  which  meet  the  definition  set  out  in 

Annex  I,  point 13, penultimate subparagraph of Regulation 
(EEC) No 822/87. 

II. ESTABLISHMENT OF THE DUTY 

Article 12 

1. The  excise  duty  levied  by  Member  States  on 
intermediate products  shall be  fixed by  reference 
to  the  number  of hectolitres  of  finished  product 
released  for  consumption  or  recorded  as  missing 
and exceeding any allowance granted. 

2. Except 

as 

provided 

in  paragraph 

3, 

Member  States  shall  charge  the  same  rate  of  duty 
on  all  products  chargeable  with  the  duty  on 
intermediate products. 

3. Subject to the  following  conditions Member  States 
may  apply  a single  reduced  rate  of duty  to  those 
intermediate  products  which  meet  the  conditions 
laid down  in Article  13(1) and (2) of Council Regulation 
(EEC) No 4252/88(1); 

(1) 0J No L 373, 31.12.1988, p. 59. 

- 23 -

the reduced  rate shall not be set more than 50% 
below the standard national rate of excise duty, 

the  reduced  rate  shall  not  fall  below  the 
minimum rate laid down in Article  /5a/ of Directive 
/JC0M(89) 527 final)"/. 

III. CONTROL 

Article 13 

Member States shall ensure that intermediate products 
are  manufactured  in  warehouses  from  constituent 
distilled  and  fermented  alcholic  drinks  which  are 
held in suspension of the relevant excise duties. 

SECTION D - ALCOHOL AND ALCOHOLIC BEVERAGES 

I.  SCOPE 

Article 14 

1. Member  States  shall  apply  an  excise  duty  to 
alcohol and alcoholic beverages in accordance with 
the requirements of this Directive. 

2. Member States shall  fix their rates  in accordance 

with Directive /_~(C0M(89) 527 final).?. 

Article 15 

For the  purposes  of  this Directive  the term "alcohol 
and  alcoholic  beverages" covers  all  products  falling 
within  CN  codes  2207  and  2208,  together  with  those 
products of  CN codes  2204,  2205  and  2206 which  have 
an actual alcoholic strength by volume exceeding  22% vol 

- 24 -

II. ESTABLISHMENT OF THE DUTY 

Article 16 

The  excise  duty  on  alcohol  and  alcoholic  beverages 
shall  be  fixed  per  hectolitre  of  pure  alcohol  at 
20°C,  and  shall  be  calculated  by  reference  to  the 
number  of  hectolitres  of  pure  alcohol  actually 
cleared  for  consumption  or  recorded  as  missing  and 
exceeding  any allowance granted. Member States  shall 
charge  the  same  rate  of  duty  on  all  products 
chargeable  with  the  duty  on  alcohol  and  alcoholic 
beverages. 

SECTION E - EXEMPTIONS 

Article 17 
1. The products covered by this Directive shall be exempt 

from excise duty: 

a) when  they  consist  of  alcoholic  beverages  of  an 
actual  alcoholic  strength  by  volume  not  exceeding 
1.2%  vol; 

b) when  completely  denatured  in  accordance  with  the 

requirements of any Member State; 

c) when  denatured  in  accordance  with  the  requirements 
of any Member State, and used for the manufacture of 
perfumes,  toiletries  and  cosmetics  or  for  external 
medical  use  and  conforming  to  the  provisions  of 
paragraph 3; 

d) when used  for the  production  of vinegar  as  defined 

in CN code 2209; 

e) when used for the production of medicines as defined 

by  Council  Directive 65/65/EEC(1)-

(1) 0J No 22, 9.2.1965, p. 369/65. 

-  25  -

2.  The  products  covered  by  t h is  D i r e c t i ve  may  be  exempt 
t he  Member 

from  e x c i se  duty  under  the  conditions  which 
S t a t es  s h a ll 

l ay  down: 

a)  when  u s ed  as  a  sample  f or  a n a l y s i s,  f or  necessary  p r o d u c t i on 

t e s t s,  or  f or  s c i e n t i f ic  purposes; 

b)  when  used  f or  s c i e n t i f ic 

research; 

c)  when  used  f or  medical  purposes  in  h o s p i t a l s. 

implementation  of 

t h is  D i r e c t i v e, 
intended  subsequent  change 
law,  each  Member  S t a te  s h a ll  communicate  to 
i n f o r m a t i o n, 
to 

t he  d a te  of 
Before 
and  t h r ee  months  b e f o re  any 
in  n a t i o n al 
t he  Commission,  t o g e t h er  w i th  a ll  r e l e v a nt 
t he 
it 
employ 
and  (1)(c). 
the  other  Member  States  within  one  month  of  receipt. 

from  1  January  1993  for  the  purposes  of  paragraphs  (1)(b) 
The  Commission  shall  transmit  the  communications  t o. 

t he  d é n a t u r a n ts  which 

formulae  of 

i n t e n ds 

SECTION F - COMMON  PROVISIONS 

Article 18 

To the quantity of alcohol or alcoholic drink contained in 
any  manufactured  product  Member  States  shall  apply  the 
excise  duty  appropriate  to  the  category  to  which  the 
alcohol or alcoholic drink concerned belongs. 

SECTION G - FINAL PROVISIONS 

- 26 -

Article  19 

Where  necessary,  the  Community  measures  to  give  effect  to 

this 

Directive 

shall  be  adopted  by  the  Commission 

according  to  the  procedure  provided  for  in  Title  VI  of 

Council 

Directive 

concerning 

the 

general 

arrangements  for  products  subject  to  excise  duty  and  on 
the holding  and movement  of such productsv,/ . 

Article  20 

Member  States  s h a ll  bring 
31  December  1992 
provisions  necessary  to  comply  with  t h is  D i r e c t i v e. 

into  force,  not 

laws,  regulations  and  administrative 

l a t er 

than 

the 

When  the  Member  States  adopt  such  provisions  they  shall  contain  a  reference 

to  this  Directive  or  shall  be  accompanied  by  such  a  reference  on  o f f i c i al 

publication.  The  Member  States  s h a ll 

lay  down  the  manner  in  which  such 

reference  shall  be  made. 

A r t i c le  21 

This Directive is addressed to the Member States 

Done at 

For the Counci I 

(1) 0J No 

, 

, p. 

(C0M(90) 

). 

-  27 -

FICHE D'EMPACT SUR  LES MIE  ET L'EMPLOI 

La  présente  proposition  de  directive  concernant  l'harmonisation  de  la 

structure  des droits d'accises  sur  les boissons  alcooliques et  sur  l'alcool 

contenu  dans  d'autres  produits  est  nécessaire  dans  le cadre  de  l'abolition 

des  frontières  fiscales  et  s'intègre  dans  l'ensemble  des  mesures  prises 

pour  l'achèvement  du marché  intérieur. 

I. 

Obligations administratives découlant  de  l'application  de  la présente 

directive pour  les entreprises : 

-  néant. 

II. 

Quels  sont  les avantages  pour  les entreprises  ? 

-  néant. 

III.  Y-a-t-lI  des  Inconvénients  pour  les  entreprises  en  termes  de  coûts 

supplémentaires ? 

-  l'application  de  la  présente  directive  n'entraînera  aucun  coût 

supplémentaire pour  les entreprises. 

IV. 

Effets sur  remploi  : 

-  néant. 

V. 

Les partenaires  sociaux  n'ont  pas été consultés. 

VI. 

Une  approche  alternative  moins  contraignante  n'est  pas  envisageable 

dans  le cadre  de  l'abolition des  frontières  fiscales. 

28 -

FiCHE FINANCIERE 

L'application  de  la présente  proposition  de  directive  n'entraînera  aucune 

augmentation des ressources propres de  la Communauté. 

ISSN 0254-1475 

COM(90) 432 final 

DOCU 

EN 

09 

Catalogue number : CB CO-90-561-EN-C 
ISBN 92-77-65610-7 

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