Council Directive 95/59/EC of 27 November 1995 on taxes other than turnover taxes which affect the consumption of manufactured tobacco
Date: 1995-11-27
Institutions: Council of the European Union
Subjects: excise duty, tax harmonisation, tobacco, tobacco industry













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31995L0059

Council Directive 95/59/EC of 27 November 1995 on taxes other than turnover taxes which affect the consumption of manufactured tobacco  


Official Journal L 291 , 06/12/1995 P. 0040 - 0045 





COUNCIL DIRECTIVE 95/59/EC of 27 November  1995 on taxes other than turnover taxes which affect the consumption of manufactured tobaccoTHE 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, Having regard to the opinion of the European Parliament  (1), 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 Second Council Directive 79/32/EEC of  18 December 1978 on taxes other than turnover taxes which affect the consumption of manufactured  tobacco  (4) have been amended substantially and on a number of occasions; whereas for reasons of  rationality and clarity the said Directives should be consolidated in a single text; (2)  Whereas the objective of the Treaty is to establish 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, achievement of this aim presupposes that the application 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, consequently, 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 abovementioned 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; (9)  Whereas these different types of manufactured tobacco should be defined; (10)  Whereas, for economic reasons, temporary derogations should be provided for certain Member  States; (11)  Whereas a distinction needs to be made between fine-cut tobacco for the rolling of cigarettes  and other smoking tobacco; (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; (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 depending on the use which is made  of them, and whereas the exemptions or refunds for particular uses need to be specified in this  Directive; (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 the Federal Republic of 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; (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 B, HAS ADOPTED THIS DIRECTIVE: 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 harmonization 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 cigarettes, -  other smoking tobacco; as defined in Articles 3 to 7. 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. 3.  Notwithstanding existing Community provisions, the definitions referred to in Articles 3 to 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. Article 3 The following shall be deemed to be cigars or cigarillos 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; 3.  rolls of tobacco with an outer wrapper of the normal colour of a cigar, and a binder, of  reconstituted 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 1,75 mm and the  circumference over at least one third of the length is not less than 34 mm. Article 4 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, the Federal Republic of Germany shall be authorized to tax the rolls of  tobacco referred to in (b) at least at the rate or amount applicable to fine-cut tobacco for the  rolling of cigarettes. 2.  A roll of tobacco referred to in paragraph 1 shall, for excise duty purposes, be considered as  two cigarettes where, excluding filter or mouth piece, 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 on. 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 3 and 4 and which can  be smoked. Article 6 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 cigarettes. 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. Article 7 1.  Products consisting 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 reconstituted tobacco, -  a wrapper of reconstituted tobacco. 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. Article 8 1.  Cigarettes manufactured in the Community and those imported from non-member  countries shall be subject to a proportional excise duty calculated on the maximum retail selling  price, including customs duties, and also to a specific excise duty calculated 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. 3.  At the final stage of harmonization of structures, the same ratio shall be established for  cigarettes 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. 4.  Where necessary, the excise duty on cigarettes may include a minimum tax component, the ceiling  for which shall be determined for each stage by the Council on a proposal from the Commission. Article 9 1.  A natural or legal person established in the Community who converts tobacco into  manufactured 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 legislation  regarding the control of price levels or the observance of imposed prices, provided that they are  compatible with Community legislation. 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 Community products. Each  scale shall be valid for all the products belonging to the group of manufactured tobacco which it  concerns, without distinction on the basis of quality, presentation, 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 reworked by the producer. Member States shall determine the conditions and formalities to which the abovementioned exemptions  or refunds are subject. TITLE II Special provisions applicable during the first stage of harmonization Article 12 1.   Subject to Article 1 (3), the first stage of harmonization of the structures of the excise duty on  manufactured tobacco shall cover a period of sixty 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 component, 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 duty 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 paragraph 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. TITLE III Special provisions applicable during the second stage of harmonization Article 15  1.  The second stage of harmonization of the structures of the excise duty on manufactured tobacco  shall run from 1 July 1978. 2.  During the second stage of harmonization Article 16 shall apply. Article 16 1.  The amount of the specific excise duty on cigarettes shall be established by  reference to cigarettes in the most popular price category according to the information available  at 1 January each year, beginning 1 January 1978. 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. 3.  If the excise duty or the turnover tax levied on the price category referred to in paragraph 1  is 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. 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. TITLE IV Final provisions Article 17 Where necessary, the Council shall, on a proposal from  the Commission, adopt provisions 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. Article 19 1.  The Directives listed in Annex 1, Part A shall be repealed, without prejudice to  the obligations of the Member States concerning the time-limits for implementation set out in Annex  I, Part B. 2.  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 its publication  in the Official Journal of the European Communities. Article 21 This Directive is addressed to the Member States. Done at Brussels, 27 November 1995. For the Council The President P. SOLBES MIRA  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. PART B >TABLE> ANNEX II CORRELATION TABLE >TABLE>