Proposal for a Council Directive amending Directive 92/12/EEC on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products (submitted in application of Article 27 of Directive 92/12/CEE)
Date: 2004-04-02
Institutions: European Commission
Subjects: alcoholic beverage, excise duty, free movement of goods, mineral oil, tobacco

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 02.04.2004 
COM(2004) 227 final 

2004/0072 (CNS) 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, 
THE COUNCIL AND THE EUROPEAN ECONOMIC 
AND SOCIAL COMMITTEE 

on the application of Articles 7 to 10 of Directive 92/12/EEC 

Proposal for a 

COUNCIL DIRECTIVE 

amending Directive 92/12/EEC on the general arrangements for products subject to 
excise duty and on the holding, movement and monitoring of such products 

(submitted in application of Article 27 of Directive 92/12/CEE) 

(presented by the Commission) 

EN 

   EN 

 
 
 
  
 
 
 
  
TABLE OF CONTENTS 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE 
COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE on the 
application of Articles 7 to 10 of Directive 92/12/EEC ............................................................. 4 

1. 

2. 

2.1. 

2.2. 

2.3. 

Introduction.................................................................................................................. 4 

Community provisions on the intra-Community movement of products already 
released for consumption in a Member State............................................................... 6 

Background .................................................................................................................. 6 

Procedure ..................................................................................................................... 6 

Evaluation of how Articles 7 to 10 are used ................................................................ 7 

2.3.1.  Volume of trade............................................................................................................ 7 

2.3.2.  Manufactured tobacco.................................................................................................. 7 

2.3.3.  Mineral oils .................................................................................................................. 8 

2.3.4.  Alcoholic beverages ..................................................................................................... 8 

3. 

3.1. 

3.2. 

3.3. 

Problems regarding the application of articles 7 to 10 and what to do about them ..... 9 

Introduction .................................................................................................................. 9 

Overall structure of Articles 7 to 10............................................................................. 9 

Article 7...................................................................................................................... 10 

3.3.1.  Situations targeted and persons required to pay......................................................... 10 

3.3.2.  Determining the persons concerned ........................................................................... 11 

3.3.3.  Administrative formalities - Formalities in the Member State of destination ........... 12 

3.3.4.  Administrative formalities - Use of the simplified accompanying administrative 

document .................................................................................................................... 12 

3.3.5.  Sales to passengers on aircraft and vessels on intra-Community journeys................ 14 

3.3.6.  Absence of provisions on offences ............................................................................ 16 

3.4. 

Article 8...................................................................................................................... 17 

3.4.1.  The difficulties taken as a whole................................................................................ 17 

3.4.1.1.  How to interpret “transported by them”..................................................................... 17 

3.4.1.2.  Non-commercial movements ..................................................................................... 18 

3.4.1.3.  Cross-border trade...................................................................................................... 20 

3.4.2.  Opinion....................................................................................................................... 20 

3.5. 

Article 9...................................................................................................................... 22 

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3.5.1. 

Importance of Article 9(1) ......................................................................................... 23 

3.5.2.  Criteria to be applied when determining whether a movement is carried out for 

commercial purposes.................................................................................................. 23 

3.5.3.  Atypical modes of transport (Article 9(3))................................................................. 24 

3.6. 

Article 10.................................................................................................................... 25 

3.6.1.  Movements of products intended for the exclusive use of a private individual......... 25 

3.6.2.  Vendor’s obligations .................................................................................................. 25 

3.6.3.  Non-existence of an accompanying administrative document................................... 27 

3.6.4.  Carriage arranged by the private individual............................................................... 27 

4. 

Conclusions ................................................................................................................ 28 

ANNEX 1 Articles 7 to 10 of the existing Directive 92/12/EEC ............................................. 29 

COUNCIL DIRECTIVE amending Directive 92/12/EEC on the general arrangements 
for products subject to excise duty and on the holding, movement and monitoring of such 
products .................................................................................................................................... 40 

3 

 
 
  
 
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, 
THE COUNCIL AND THE EUROPEAN ECONOMIC 
AND SOCIAL COMMITTEE 

on the application of Articles 7 to 10 of Directive 92/12/EEC 

1. 

INTRODUCTION 

This is the report on the examination of Articles 7 to 10 of Council Directive 92/12/EEC of 
25 February 1992 on the general arrangements for products subject to excise duty and on the 
holding, movement and monitoring of such products1 required by Article 27 of the Directive 
(referred to in what follows as “the Directive”), which provides that: 

“Before  1  January  1997  the  Council,  acting  unanimously  on  the  basis  of  a  report  from  the 
Commission, shall re-examine the provisions of Articles 7, 8, 9 and 10 and, on the basis of a 
proposal  from  the  Commission  after  consulting  the  European  Parliament,  adopt  any 
necessary amendments.” 

For the following reasons, this deadline was not kept to: 

–  The  deadline  laid  down  in  Article  27  did  not  give  the  parties  concerned  time  to  gain  a 
perspective on the situation and give a valid verdict on any difficulties there might be in 
applying Articles 7 to 10. It should also be emphasised that at the end of 1996 trade in tax-
paid  products  represented  only  a  small  proportion  of  intra-Community  commercial 
transactions in excisable products.  

Since then, interest in moving tax-paid excise products has grown. For instance, there has 
been  a  considerable  increase  in  Internet  operations  (distance  sales).  It  was  consumer 
interest  in  purchasing  by  this  method  that  led  traders  to  request  the  Member  States 
concerned to introduce simplified procedures for surveillance and payment of excise duty. 
The Commission therefore considered it better to await the outcome of the introduction of 
“alternative”  national  procedures  of  this  type  −  which  would  show  whether  they  were 
needed − before drawing any conclusions regarding Community legislation. 

–  Again,  the  Court  of  Justice  handed  down  its  judgment  in  Case  C-296/95  (ex  parte  EMU 
Tabac SARL, The Man in Black, Ltd) on 2 April 1998. As the Case raised the problem of 
how  to  interpret  the  provisions  of  Article  8,  the  Commission  had  to  take  the  Court’s 
interpretation into account in its report. 

–  In recent years, there have been numerous complaints from the public about the restrictive 
way  in  which  some  Member  States  applied  the  provisions  of  Article  8.  The  information 
obtained in the course of dealing with these complaints has provided a better understanding 
of  the  difficulties  encountered  regarding  the  interpretation  of  certain  Community 
provisions on excise matters. 

1 

OJ L 76 of 23.3.1992, p.1, as last amended by Council Regulation (EC) No 807/2003 of 14 April 2003 (OJ 
L 122, 16.5.2003, p.36). 

4 

 
 
  
 
 
                                                 
Generally speaking excisable products moving within the Community do so under excise duty 
suspension arrangements. No excise duty has been paid on these products, they have not been 
released for consumption and they move from a tax warehouse in one Member State to a tax 
warehouse in another under cover of the accompanying administrative document (AAD). This 
ensures  that  excise  duty  −  the  duty  payable  on  the  consumption  of  these  products  −  is 
collected  in  the  Member  State  in  which  it  is  assumed  that  consumption  is  deemed  to  take 
place. 

Excisable  products  already  released  for  consumption  −  on  which  excise  duty  has  therefore 
been paid in one Member State − may also be moved within the Community. It is movements 
of  this  type  that  are  regulated  by  the  provisions  of  Articles  7  to  10  of  the  Directive.  These 
Articles  lay  down  the  general  principles  governing  the  taxation  of  such  products  and  the 
procedures  for  applying  the  principles.  One  aim  is  to  enable  members  of  the  public  to  buy 
excisable  products  on  the  domestic  market  of  one  Member  State  and  then  take  them  to 
another Member State without having to pay more excise duty. A further aim is to ensure that, 
where products are moved for commercial purposes, excise duty is paid in the Member State 
where  the  excisable  products  are  consumed.  The  procedure  for  the  intra-Community 
movement  of  excisable  products  already  released  for  consumption  in  one  Member  State  is 
described in point 2 below. 

5 

 
 
  
 
2. 

COMMUNITY  PROVISIONS  ON  THE  INTRA-COMMUNITY  MOVEMENT  OF  PRODUCTS 
ALREADY RELEASED FOR CONSUMPTION IN A MEMBER STATE 

2.1. 

Background 

The  final  wording  of  Articles  7  to  10  of  the  Directive  is  the  outcome  of  long  and  complex 
discussion  in  the  Council  of  the  proposal  for  a  directive  presented  by  the  Commission  in 
November  19902,  the  proposal  having  taken  account  of  criteria  drawn  up  by  the  Ecofin 
Council of 13 November 1989. 

Instead of four articles as at present, the Commission proposal had a single provision intended 
to cover all intra-Community movement of products on which excise duty had already been 
paid. The proposed article (Article 5) included provisions which would have made it possible 
to collect excise duty in a Member State other than that in which the products were consumed. 

As the general principles governing the single market already guaranteed private individuals 
the freedom to purchase, the above proposal for a directive did not include any provisions on 
purchases  by  such  persons  in  Member  States  other  than  their  own.  But  it  should  be 
remembered that, at the time the above proposal was drafted, it was reasonable to assume that 
tax rates would be more closely harmonised. 

When discussing the Directive, the Council gradually realised what difficulties and obstacles 
had to be overcome to achieve common rates of excise duty in the short term, as proposed by 
the Commission. Consequently, as the rates were not harmonised, the focus of harmonisation 
gradually transferred to the system for the movement and surveillance of excisable products. 

At the same time it also became clear that the provisions on the intra-Community movement 
of  such  products  would  have  to  be  reviewed  in  order  to  lay  down  clearer  application  rules. 
The present wording of Articles 7 to 10 was the outcome of this review. 

To make it easier to read this report, the present wording of Articles 7 to 10 is reproduced in 
Annex 1. 

2.2. 

Procedure 

The Directive’s procedure for products already released for consumption may be summarised 
as follows: 

(1) 

(2) 

(3) 

In the case of products moved between Member States for commercial purposes 
excise duty is chargeable in the Member State of destination. 

There are legal provisions to allow Member States to collect excise duty from persons 
involved in the intra-Community movement of such products (Article 7(3)). 

For  commercial  movements  −  other  than  “distance  sales”,  which  are  covered  by 
Article 10  −  a  simplified  accompanying  administrative  document  (SAAD)  has  to  be 
used  to  ensure  proper  surveillance  (Article  7(4)).  The  form  and  content  of  this 
document  are  laid  down  in  Commission  Regulation  (EEC)  No  3649/92  of 
17 December 1992 on a simplified accompanying document for the intra-Community 

2 

COM(90) 431 final of 7.11.1990. 

6 

 
 
  
 
                                                 
movement  of  products  subject  to  excise  duty  which  have  been  released  for 
consumption in the Member State of dispatch.3 

The  Regulation  also  lays  down  specific  provisions  on  the  guarantee  and  on  the 
payment of excise duty in the Member State of destination (Article 7(5)). 

In the case of products purchased directly by private individuals for their own use 
and then taken by them to another country, Article 8 provides that excise duty must be 
charged in the Member State where the products were acquired. 

Certain  criteria,  including  guide  levels,  are  laid  down  with  a  view  to  distinguishing 
between commercial and non-commercial transactions (Article 9(2)). 

In  the  case  of  “distance  sales”  (where  a  vendor  who  is  not  an  authorised  ware 
housekeeper,  registered  trader  or  non-registered  trader  sends  goods  to  a  person  in 
another Member State) excise duty is payable in the Member State of destination by 
the foreign vendor (Article 10). 

There  are  provisions  to  ensure  that  excise  duty  paid  in  the  Member  State  where  the 
products were purchased is reimbursed after duty has again been paid in the Member 
State of destination (Articles 7(6) and 10(4)). 

(4) 

(5) 

(6) 

(7) 

(8) 

2.3. 

Evaluation of how Articles 7 to 10 are used 

2.3.1.  Volume of trade 

The  regular  intra-Community  movement,  for  commercial  purposes,  of  excisable  products 
already released for consumption in a Member State represents a rather marginal proportion 
of the total volume of trade in these products. Member States are therefore generally not able 
to provide significant statistics on these movements. However, overall estimates suggest that 
the  movement  of  products  on  which  excise  duty  has  already  been  paid  represents  no  more 
than 3% of total intra-Community trade in excisable products. 

But this overall figure needs to be broken down by category of excisable product because the 
volume of products moved differs for the different categories. 

2.3.2.  Manufactured tobacco 

There is very little regular commercial intra-Community movement of manufactured tobacco 
that has already been released for consumption. This is mainly because: 

–  All manufactured tobacco released for consumption is already packaged for use. As many 
Member States use fiscal strips or other marks to show that excise duty has been paid, it 
would  be  very  difficult  to  take  such  products  released  for  consumption  in  one  Member 
State  and  legitimately  trade  them  in  another.  Also,  once  they  have  been  applied,  such 
marks are difficult to remove without damaging the packaging or the product itself.  

–  Even  though  other  Member  States  may  not  use  tax  marks  they  may  nevertheless  have  a 
distribution monopoly and therefore do not allow tobacco products to be sold outside the 
authorised distribution network. 

3 

OJ L 369 of 18.12.1992, p. 17. 

7 

 
 
  
 
                                                 
–  Under the provisions of Directive 2001/37/EC,4 all packets of manufactured tobacco must 
bear  health  warnings  in  the  official  language(s)  of  the  Member  State  where  the  products 
are consumed. 

Nevertheless, in view of the major differences between the tax rates applicable in the different 
Member  States,  regular  and  occasional  intra-Community  movements  of  manufactured 
tobacco products for private use represent a very large proportion of purchases made by EU 
citizens outside their own Member State. 

2.3.3.  Mineral oils 

There  is  only  a  marginal  amount  of  regular  commercial  and  private  intra-Community 
movement  of  mineral  oils  already  released  for  consumption.  This  is  mainly  because  the 
production  and  distribution  of  mineral  oils  is  managed  by  a  relatively  small  number  of 
authorised traders. Also, tax-paid fuels are stored in distribution facilities which serve well-
defined territories. 

2.3.4.  Alcoholic beverages 

The  intra-Community  movement  of  alcoholic  beverages  already  released  for  consumption 
accounts for the largest proportion of commercial and private transactions carried out under 
the  tax-paid  arrangements.  The  alcoholic  beverages  sector  also  differs  from  the  other  two 
sectors in the following ways: 

–  a large number of producers is involved; 

–  there is a large variety of products; 

–  production is closely identified with a geographical area (e.g. products typical of a region, 

controlled appellations of origin). 

The above characteristics suggest why there might be a big demand for products which have 
specific  characteristics  and  are  not  always  moved  under  the  rules  for  tax  warehouses.  Also, 
the low tax levied by some Member States (e.g. a zero rate on wine) reflects the fact that a 
large  proportion  of  the  population  consumes  the  alcoholic  beverage  concerned  and  explains 
the  phenomenon  of  large  numbers  of  both  regular  and  occasional  intra-Community 
movements of these products for private purposes. 

4 

Directive  2001/37/EC  of  the  European  Parliament  and  of  the  Council  of  5  June  2001  on  the 
approximation of the laws, regulations and administrative provisions of the Member States concerning 
the manufacture, presentation and sale of tobacco products (OJ L 194 of 18.7.2001, p. 26). 

8 

 
 
  
 
                                                 
3. 

PROBLEMS REGARDING THE APPLICATION OF ARTICLES 7 TO 10 AND WHAT TO DO 
ABOUT THEM 

3.1. 

Introduction 

As  long  ago  as  1996  the  Commission  consulted  the  national  administrations  and  trade 
associations  involved  in  the  excisable  products  sector  on  any  difficulties  they  might  have 
concerning the application of Articles 7 to 10. 

The result indicated that the Article 7 to 10 procedures were generally considered satisfactory 
by the trade associations whereas the national administrations expressed some concern, inter 
alia, about the weaknesses of the administrative surveillance system. The results of a Fiscalis 
seminar on the rules governing the movement of excisable products under Articles 7 to 10 of 
Directive 92/12/EEC confirmed this conclusion. 

It  has  to  be  said  that,  although  the  volume  of  intra-Community  movements  of  tax-paid 
products  remains  relatively  low,  since  this  first  survey  more  and  more  traders  and  private 
individuals are trying to interpret Articles 7 to 10 in such a way as to allow them to legitimise 
trade practices involving payment of excise duty in the Member State where the products are 
acquired.  Also  the  increase  in  the  volume  of  commercial  transactions  conducted  via  the 
Internet and the abolition of duty-free sales to persons travelling within the Community have 
resulted in more use being made of the above provisions. 

The Commission therefore considers that, in the light of this finding and of the experience of 
both Member States and traders, the time has now come to present a report on the application 
of  Articles  7  to  10  of  the  Directive.  This  report  takes  account  of  the  results  of  the 
Commission’s 2002 survey of the national administrations and traders involved in the intra-
Community movement of excisable products. 

Points  3.2  to  3.6  below  explain  the  provisions  of  Articles  7  to  10  and  the  difficulties 
encountered in applying them, set out the Commission’s opinion on each of these difficulties 
and state what remedy it envisages for each.  

3.2. 

Overall structure of Articles 7 to 10 

Difficulties encountered 

As indicated in point 2.1, the current wording of Articles 7 to 10 was the outcome of long and 
complex discussion in the Council. 

However, it has to be accepted that the resulting legislative structure was less than congruous. 
There  are  three  provisions  which  apply  to  one  particular  situation,  namely  to  excisable 
products held for commercial purposes in a Member State other than where the products were 
purchased, and all three provisions have the same aim, i.e. to ensure that excise duty is paid in 
the  other  Member  State.  What  is  more,  none  of  the  three  provisions  clearly  establishes  its 
scope. As a result, certain types of movement may be covered by several different provisions 
each requiring the completion of different formalities. 

9 

 
 
  
 
Opinion 

In the interests of consistency and easier reading, the scope of the articles intended to ensure 
that  the  excise  duty  is  paid  in  the  Member  State  of  destination  should  be  defined  more 
precisely.  

Accordingly,  under  the  proposal  for  a  Directive  amending  Articles  7  to  10  of  Directive 
92/12/EEC (referred to below as “the proposal for a Directive”) Article 9(1) would no longer 
indicate when duty becomes chargeable. In this, the existing Article 9(1) simply repeats what 
is already stated in Article 7(1) with one difference: that the duty is chargeable to the holder 
of the products rather than to the persons identified in the situations covered by Article 7. To 
cover the situations currently referred to in Article 9, an additional sub-paragraph has been 
added  to  Article  7(3)  to  the  effect  that,  where  it  is  not  expressly  stated  to  whom  the  tax  is 
chargeable, it is to be charged to the holder of the products. The products in question may be 
goods held by private individuals for purposes other than their personal use, or products held 
by a trader or body governed by public law that has not met the requirements set out in the 
proposed Article 7(5). 

3.3. 

Article 7 

3.3.1. 

Situations targeted and persons required to pay 

Difficulties encountered 

The wording of Article 7(1) is very clear on the question of determining where excise duty is 
chargeable  when  products  are  moved  for  commercial  purposes  from  one  Member  State  to 
another. 

But the provisions of paragraphs (2) and (3) are generally considered difficult to apply. Here 
the situations to which these provisions are intended to apply should be borne in mind: 

a) Article 7(2) distinguishes between different situations in which excisable products are held 
for  commercial  purposes  in  a  Member  State  other  than  the  one  in  which  the  products  were 
released for consumption. These situations are the delivery of excisable products to a trader or 
body  subject  to  public  law  and  the  moving  of  such  products  within  a  Member  State  with  a 
view  to  the  products  being  sold.  The  latter  in  particular  covers  occasional  sales  by  a 
wholesaler  to  retailers  or  restaurants  established  in  a  neighbouring  Member  State  and 
“itinerant sales” when a foreign vendor pitches his products to potential customers. 

Although no particular problems arise in situations where goods are delivered to a trader who 
first placed an order, problems do arise where excisable products are  moved within another 
Member State prior to any commercial transaction having taken place. Article 7 does not in 
fact  include  any  provisions  on  such  movements  to  cover  how  the  accompanying 
administrative  document  should  be  used  or  the  formalities  to  be  completed  when  goods 
remain unsold and are therefore returned to the Member State of origin. 

b) Article 7(3) lays down who may be required to pay the excise duty in the Member State of 
destination  and  must  therefore  complete  the  paragraph  (5)  formalities.  The  very  “flexible” 
wording  of  paragraph  (3)  allows  Member  States  great  freedom  of  application,  leaving  them 
free to issue a general provision or to decide each case individually. 

Such  flexibility  causes  some  Member  States  difficulties.  The  phrase  “depending  on  all  the 
circumstances”  does  not  provide  any  criteria  for  whether  excise  duty  should  be  paid  by  the 

10 

 
 
  
 
consignor, the consignee or another person (e.g. the carrier). These Member States consider it 
essential  to  establish  first  who  is  required  to  pay  the  excise  duty  so  that  their  respective 
national laws can clearly identify who has to complete the paragraph (5) formalities. 

Many  Member  States  have  opted  for  a  procedure  requiring  the  consignee  to  pay  the  excise 
duty and therefore complete the formalities laid down in paragraph (5). 

Opinion 

In  view  of  the  difficulties  over  what  procedures  to  apply  in  certain  situations  covered  by 
Article  7,  and  the  absence  of  provisions  for  determining  unambiguously  who  is  liable  for 
excise  duty  in  the  Member  State  of  destination,  Article  7  needs  to  be  worded  more  clearly. 
Here two separate situations have to be clearly defined: 

–  where excisable products are dispatched to the territory of another Member State by trader 
not established in that Member State with a view to being sold there, excise duty is payable 
by the foreign vendor in accordance with the procedure laid down for “distance sales” (see 
point 3.6.2). This procedure, which does not require use of an SAAD, solves the problems 
referred to at 3.3.1(a) above.  

–  where products are used within another Member State for the purposes of a trader or body 

governed by public law, excise duty is payable by those parties. If this obligation is 
introduced it will put “non-registered traders”, as defined in Article 16(3), and the Article 7 
trader and body governed by public law on an equal footing for the purpose of 
administrative formalities. Nevertheless, if a foreign vendor should wish to pay the excise 
duty on behalf of those parties, the procedure used for “distance sales” could also be 
applied to him (see point 3.6.2).  

The phrase “used for the purposes of” covers situations in which the products are delivered to 
the trader or body governed by public law by a trader not established in the Member State of 
destination,  and  products  otherwise  used  for  the  purposes  of  an  economic  operator  or  body 
governed  by  public  law.  This  situation  arises,  for  example,  when  a  trader  sends  stock  from 
one Member State to another under “duty-paid” arrangements. 

In the proposal for a directive, Article 7(3) defines the situations in which the products are 
held  and  who  is  required  to  pay  the  duty  in  each  situation.  Article  7(2)  is  deleted  since  it 
merely repeats what is already said in Article 7(1) and 7(3). 

3.3.2.  Determining the persons concerned 

Difficulties encountered 

The terms “for the purposes of a trader carrying out an economic activity independently” and 
“for the purposes of a body governed by public law” are not defined in the Directive. Each 
Member State therefore has its own interpretation of the terms. 

Opinion 

The parties concerned are “all traders” and “all bodies governed by public law”. It is therefore 
sufficient simply to use the words “traders” and “bodies governed by public law”. 

Article 7(3) of the proposal for a directive refers solely to “trader” and “body governed by 
public law”. 

11 

 
 
  
 
3.3.3.  Administrative formalities - Formalities in the Member State of destination 

Difficulties encountered 

Traders complain that the formalities set out in Article 7(5) of the Directive are too complex 
and restrictive. The formalities concerned are those requiring a guarantee to be lodged before 
goods  are  dispatched  and  excise  duty  to  be  paid  upon  delivery  of  the  products.  Generally 
operators who trade under the tax-paid arrangements are small businesses that have enormous 
difficulties  complying  with  the  formalities.  Such  undertakings  do  not  often  get  involved  in 
commercial  transactions  with  parties  in  other  Member  States  (if  they  did  they  would  be 
authorised tax warehouses). This is particularly true of small-scale wine producers, who find 
it  extremely  onerous  to  comply  with  the  procedures  required  in  the  Member  State  of  final 
consumption. 

The traders’ associations consulted stated that the complexity of these formalities could lead 
to some traders abstaining from this type of intra-Community movement or to their deciding 
to use irregular methods. 

Opinion 

To  resolve  the  difficulties  arising  out  of  formalities  to  be  completed  at  destination  the 
Commission  considers  that  the  excise  duties  should  be  chargeable  to  the  party  who  is  best 
placed to accomplish the formalities. 

This  is  the  trader  not  established  in  the  Member  State  of  destination  when  the  products  he 
holds  have  not  yet  been  traded  (the  situation  covered  by  the  first  subparagraph  of  the  new 
Article 7(3)). 

When the products are used in the Member State of destination for the purposes of a trader or 
a  body  governed  by  public  law  (the  situation  covered  by  the  second  paragraph  of  the  new 
Article 7(3)) the general rule is that excise duty should be collected from the party established 
in the Member State of destination to whom the products are consigned. If, in such cases, the 
foreign vendor indicated his intention of paying the duty at destination (for example, because 
he regularly makes deliveries to that Member State under duty-paid arrangements) he can opt 
to be come the excise debtor instead of the consignee, in which case the simplified procedure 
for distance sales applies (see point 3.6.2.) The combination of centralising guarantees at an 
excise  office  and  close  cooperation  between  Member  States  should  provide  a  satisfactory 
response to traders’ legitimate requests for simplification.  

Article 7(3) of the proposal for a directive defines the situations in which goods must be held 
and determines which party is required to pay in each situation. Article 7(5) sets out the rules 
with which those required to pay excise duty have to comply. 

3.3.4.  Administrative  formalities  -  Use  of  the  simplified  accompanying  administrative 

document 

Difficulties encountered 

- Establishment and surveillance 

The details of the accompanying administrative document required in Article 7(4) are set out 
in Commission Regulation (EEC) No 3649/92 where the document is called the “simplified 
accompanying document”. 

12 

 
 
  
 
Most  Member  States  consider  this  document  necessary  but  have  little  confidence  in  the 
effectiveness  of  the  surveillance  it  is  supposed  to  guarantee.  Some  therefore  require  the 
simplified accompanying [administrative] document (SAAD) to be backed up by a guarantee 
certificate, or require excise duty to be paid in the Member State of destination. 

Their  lack  of  confidence  mainly  arises  out  of  the  fact  that  much  more  flexibility  is  allowed 
when drawing up this document, and in respect of the attendant checks, than is the case with 
the document used for suspension arrangements. The simplified accompanying administrative 
document (SAAD) is completed − without any (direct or indirect) input from, or supervision 
by, the national tax administrations − by and for traders most of whom have no status of any 
kind for excise purposes.  

Reimbursement 

Sometimes the SAAD is deemed insufficient for the purpose of obtaining reimbursement of 
excise duty paid in the Member State of departure. 

Article 4 of Regulation No 3649/92 provides that, if repayment of the excise duty paid in the 
Member  State  of  departure  is  to  be  obtained,  the  consignee  must  add  in  Copy  No  3  of  the 
SAAD information about what tax treatment was applied to the goods in the Member State of 
destination and then return the document to the consignor. However, under Article 22(3) of 
Directive  92/12/EEC,  Member  States  may  refuse  requests  for  reimbursement  where  this 
document does not satisfy the correctness criteria they lay down.  

As the information entered on the back of Copy No 3 of the SAAD is not endorsed by the tax 
authorities of the Member State of destination, some Member States require the consignor to 
present  further  administrative  proofs  in  addition  to  Copy  No  3  to  back  up  any  claim  for 
reimbursement.  It  should  also  be  pointed  out  that  the  documents  used  by  Member  States  to 
certify that excise duty has been paid are not in any way harmonised. This does not facilitate 
the processing of applications for reimbursement under Article 7. 

Opinion 

In the Commission’s view there is no need for Member States to require, as some do for or 
the purposes of checking up, that the SAAD be accompanied by a guarantee certificate or a 
certificate of payment of excise duty in the Member State of destination. The references to the 
prior  declaration  that  have  to  be  entered  in  Boxes  3  and  6  of  the  SAAD  are  sufficient  to 
enable the authorities to check whether all obligations have been met in the Member State of 
destination. 

Where reimbursement is concerned, to make it easier to process traders’ applications it will be 
necessary  to  require  the  authorities  of  the  Member  State  of  destination  to  authenticate  the 
entry made in Copy No 3 of the simplified accompanying administrative document to show 
that the products concerned have been received. Since the party liable for excise duty in the 
Member  State  of  destination  is  required  to  complete  the  formalities  upon  reception  of  the 
products,  the  new  requirement  will  not  increase  the  administrative  burden  borne  by  traders. 
The  new  provision  will  harmonise  the  conditions  subject  to  which  reimbursement  can  be 
obtained  and  render  superfluous  the  requirements  of  certain  Member  States  which  demand 
other proofs in addition to Copy No 3 of the SAAD. 

Commission Regulation No 3649/92 will have to be amended to provide that the authorities of 
the Member State of destination must endorse the return copy of the said document.  

13 

 
 
  
 
3.3.5. 

Sales to passengers on aircraft and vessels on intra-Community journeys 

Present situation 

The legal position 

The transitional provisions of Article 28 of the Directive ceased to apply on 1 July 1999. They 
allowed Member States to exempt products supplied by tax-free shops and carried away in the 
personal  luggage  of  travellers  taking  an  intra-Community  flight  or  sea-crossing  to  another 
Member State. It should be noted that products supplied on board an aircraft or vessel during 
an intra-Community passenger service were treated in the same way as products supplied by 
tax-free shops.  

The ending of tax-free sales within the European Union had a particular incidence on the tax 
treatment  of  excisable  products  sold  on  board  ferries  and  aircraft  and  not  intended  for 
immediate consumption (sales for immediate consumption may be exempted from excise duty 
if  the  conditions  of  Article  23(5)  of  the  Directive  are  met).  The  VAT  and  excise  rules 
applicable  to  such  sales  from  1  July  1999  were  clarified  in  a  Commission  notice.5  As  a 
reminder, the main principles governing excise in these situations are: 

–  Ferry  and  airline  operators  may  no  longer  carry  such  products  tax-free  since,  under  the 
provisions of Directive 92/12/EEC, the products are deemed to no longer be covered by the 
tax suspension system once they are loaded on board. 

–  The products are therefore subject to the rate of excise duty in force in the Member State in 
which the intra-Community journey begins. They may be sold at a price including the rate 
of  excise  duty  of  the  Member  State  of  embarkation  until  such  point  as  the  means  of 
transport enters the national territory of the Member State of destination. 

–  Under  Article  7(1)  and  (2)  excise  duty  is  payable  again  on  goods  sold  in  the  national 
territory of the Member State of destination. However, ferry and airline operators wishing 
to avoid taxation in the second Member State may declare that they have no intention of 
selling the goods in the territory of that Member State. Article 7(1) and (2) then no longer 
applies  and  the  goods  may  be  held  on  board  without  duty  having  to  be  paid  again.  The 
provisions  of  Article  7(7)  and  (8)  on  checks  and  prior  declaration  then  apply  although 
under  Article  7(9)  the  Member  States  concerned  may  agree  bilaterally  to  authorise  the 
application of simplified procedures. 

–  Traders  may  also  continue  to  sell  in  the  territory  of  other  Member  States  tax-paid  goods 
loaded on board in a given Member State. Article 7(1) and (2) then applies and the excise 
duty due in the Member State in question has to be collected. Under Article 22(3) traders 
may apply for reimbursement of excise duty already paid in the Member State where the 
goods were loaded. Each tax authority is required to lay down the procedures for collecting 
and refunding duties and for simplified procedures where appropriate. 

–  For intra-Community services calling in one or more Member States the basic rule is that 
each section of the journey has to be treated separately. If a ferry operator loads goods in 
Member  State  A  and  wishes  to  sell  them  on  board  whilst  the  ferry  is  making  passage  in 

5 

Commission notice 1999/C 99/08 concerning the VAT and excise rules to be applied from 1 July 1999 
by suppliers of goods sold on board ferries and aircraft or in airports to passengers travelling within the 
European Union (JO C 99 du 10.4.1999, p. 20). 

14 

 
 
  
 
                                                 
international waters between Member State B and Member State C there is no legal basis 
for charging tax on these sales at the rates applicable in Member State A. Given that there 
is  no  intention  to  bring  the  goods  back  to  the  Member  State  of  departure  they  must  be 
taxed, first in Member State B and then in Member State C, in accordance with Article 7(1) 
and (2). 

Implementing procedures 

Strict  compliance  with  the  above  procedures  requires  traders  to  do  a  massive  amount  of 
administrative  work.  Some  Member  States  have  therefore  authorised  the  use  of  simplified 
procedures of which the following are examples: 

–  On some sea links between Member States the States concerned have introduced the kind 
of  simplification  provided  for  in  the  third  indent  above.  This  means  that  a  link  between 
Member  State  A  and  Member  State  B  is  treated  as  if  goods  were  being  moved  from 
Member  State  A  back  to  Member  State  A  via  the  territory  of  Member  State  B.  Hence 
excisable products on board intended to be taken away by passengers may be sold at the 
excise rate applicable in Member State A (generally the Member State applying the lower 
rate) throughout the journey except that part when the vessel is in the territory of Member 
State B. 

–  Traders  have  the  option  of  loading  the  products  concerned  onto  a  vessel  under  the 
suspension arrangements. These cease to apply when the products enter the territory of the 
Member  State  from  which  the  trader  intends  to sell the products. At this point the trader 
has to pay the duty due in that Member State. 

This  simplification  is  one  of  the  tax  suspension  procedures  and  means  that  the  Member 
State of destination accepts that the products being moved under the arrangement may be 
released for consumption without a consignee authorised for excise purposes first having 
taken charge of them physically and, therefore, without their having to be unloaded from 
the vessel. 

Within the limits set by the Directive’s legal framework, each Member State can decide for 
itself what procedural simplifications it will grant its traders. 

Opinion 

The principle that when goods are released for consumption in one Member State and held for 
commercial purposes in another excise duty must be paid in the second Member State applies 
to  all  excisable  products  sold  in  the  course  of  an  intra-Community  journey,  unless,  as 
provided for by Commission notice 99/08 referred to above, the products are held on board a 
vessel or aircraft making crossings or flights between two Member States but not available for 
sale when the vessel or aircraft is in the territory of one of those two Member States. In this 
case, the products are not deemed to be held for commercial purposes in that Member State. 
In order to remove any uncertainty on this point, it should be incorporated expressly into the 
Directive. 

Community-wide harmonisation of the administrative procedures that traders are required to 
complete  would  still  be  desirable  because,  as  can  be  seen,  only  a  few  Member  States  have 
introduced  procedural  simplifications  and  the  traders  concerned  therefore  have  to  apply  a 
wide  variety  of  different  procedures  for  the  different  Member  States.  It  should  be  stressed 
here  that  in  some  cases  simplified  administrative  procedures  have  not  been  introduced 

15 

 
 
  
 
 
 
because the procedure for doing so is itself so complicated. Some Member States have come 
to  the  conclusion  that  bilateral  agreements  of  the  type  mentioned  in  Article  7(9)  can  be 
negotiated  only  at  the  political  level  whilst  others  consider  that  a  simple  administrative 
agreement is enough. 

Hence to provide a satisfactory response to traders’ legitimate demands for simplification, the 
Commission  calls  on  the  Member  States  to  collaborate  with  it  in  drawing  up  common 
simplified procedures whilst remaining within the existing legal framework. Should the need 
become  clear  the  Commission  could  see  its  way  to  using  the  non-regulatory  forum  of  the 
Excise Committee to work out a common Community framework for introducing simplified 
procedures. 

Since these simplified procedures would not alter the general principle governing taxation the 
proposal is that the Article 7(9) provision, by which bilateral agreements may be authorised, 
should  be  replaced  by  one  permitting  such  agreements  to  be  authorised  by  simple 
administrative agreement. 

The  third  subparagraph  of  Article  7(1)  expressly  provides  that  products  held  on  board  a 
vessel  or  aircraft  making  crossings  or  flights  between  two  Member  States  but  not  available 
for sale when the vessel or aircraft is in the territory of a Member State are not deemed to be 
held  for  commercial  purposes  in  that  Member  State.  Furthermore,  Article  7(9)  states  that 
simplified procedures may be introduced by simple bilateral administrative agreement. 

3.3.6.  Absence of provisions on offences 

Difficulties encountered 

By  contrast  with  movements  under  the  suspension  arrangements,  for  which  specific 
provisions on offences were included in Directive 92/12/EEC (see Articles 14 and 20), there 
are no Community provisions on how to proceed in the event of losses or offences occurring 
under the “tax-paid” arrangements. 

Opinion 

The  fact  that  the  Directive  contains  no  legal  provisions  on  losses  and  offences  occurring 
whilst tax-paid excisable products are being moved represents a legal loophole which has to 
be closed. The absence of provisions on how to determine the Member State in which excise 
duty is due could cause conflict of interest between Member States and, in some cases, lead to 
double taxation. What is more, it could lead to different traders in comparable situations being 
treated  entirely  differently  in  different  Member  States  and,  therefore,  to  distortion  of 
competition between traders. Such losses and offences should therefore be made subject to a 
regime  similar  to  that  for  losses  and  offences  detected  in  connection  with  the  excise 
suspension arrangements. 

The  proposal  for  a  Directive  introduces  specific  provisions  on  how  to  handle  losses  and 
offences  detected  during  movement  within  the  Community  of  products  already  released  for 
consumption (new Articles 10a to 10c). 

16 

 
 
  
 
3.4. 

Article 8 

Article 8 of the Directive states that, as regards products acquired by private individuals for 
their own use and transported by them, the principle governing the internal market lays down 
that excise duty is to be charged in the Member State in which they are acquired. 

Despite  its  apparent  simplicity  this  Article  has  been  the  focus  of  numerous  discussions 
centring mainly on: 

–  how to interpret “transported by them”; 

–  how to treat other types of non-commercial movements of goods; 

–  cross-border trade. 

3.4.1.  The difficulties taken as a whole 

3.4.1.1.  How to interpret “transported by them”  

In 1995 the London Court of Appeal referred a question on the interpretation of Article 8 to 
the Court of Justice for a preliminary ruling. The referral was made in connection with a case 
involving products released for consumption in Member State B and acquired by, or on behalf 
of,  a  private  individual  resident  in  Member  State  A  through  an  agent  who  also  arranged 
carriage of the products. 

A structure for tax purposes, based on a wide interpretation of Article 8, had been set up by a 
network of associated companies. It worked as follows: 

–  one  company  in  the  group  produced  a  particular  make  of  cigarette  aimed  at  the  United 

Kingdom market; 

–  a  second  company  with  links  to  the  first  released  the  cigarettes  for  consumption  in  the 

Grand Duchy of Luxembourg where they were sold both wholesale and retail; 

–  a  third  company,  with  links  to  the  other  two  and  established  in  the  United  Kingdom, 
centralised orders from British individuals for cigarettes of this make already released for 
consumption in Luxembourg; it also arranged carriage to the United Kingdom. 

The  tax  principle  propounded  by  these  companies  was  that  ownership  of  the  products  was 
transferred to the private individual when he placed the order. The companies maintained that, 
since  the  carrier  did  not  participate  in  the  commercial  transaction  (he  did  not  sell  the 
cigarettes, but simply received orders  to purchase and carry the products), the provisions of 
Article 8 of Directive 92/12/EEC applied. 

Still according to the companies, the movements concerned were similar to those involved in 
“distance sales” which were not explicitly covered by the Directive and therefore had to be 
treated  by  analogy  with  the  said  Article.  The  orders  placed  by  private  individuals  in  any 
month  did  not  exceed  the  guide  levels  laid  down  in  Article  9(2),  i.e. 800  cigarettes  per 
purchaser. 

The  United  Kingdom  authorities  considered  that this  structure  had  been  set  up  to  evade  tax 
and  that  it  enabled  a  British  individual  (“without  leaving  the  comfort  of  his  armchair”)  to 
purchase  products  in  another  Member  State  where  tax  rates  were  lower  than  those  in  the 

17 

 
 
  
 
United  Kingdom.  The  authorities’  argument,  upheld  by  the  Advocate-General,  was  that 
Article 8 applied solely if the following conditions obtained simultaneously: 

(a) 

the products had to have been acquired by private individuals; 

(b) 

they had to have been acquired for the personal use of those individuals; 

(c) 

the products had to be carried by the individuals themselves. 

In its judgment of 2 April 1998 in Case C-296/95,6 the Court decided that: 

“Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products 
subject  to  excise  duty  and  on  the  holding,  movement  and  monitoring  of  such  products  as 
amended by Council Directive 92/108/EEC of 14 December 1992 must be interpreted as not 
precluding the levying of excise duty in Member State A on goods released for consumption 
in Member State B, where the goods were acquired from a company, X, for the use of private 
individuals in Member State A, through a company, Y, acting in return for payment as agent 
for those individuals, and where transportation of the goods from Member State B to Member 
State  A  was  also  arranged  by  company  Y  on  behalf  of  those  individuals  and  effected  by  a 
professional carrier charging for his services” 

The  Court  thereby  put  an  end  to  this  particular  arrangement.  Concerning  the  case  that  had 
been referred, the Court recognised that the transactions had been of a commercial nature and 
that  excise  duty  was  therefore  payable  in  the  Member  State  in  which  the  products  were 
consumed. 

However,  it  should  be  pointed  out  that,  in  the  grounds  for  its  decision,  the  Court  gave  its 
interpretation  of  the  phrase  “transported  by  them”.  Particularly  in  points  33  to  36  of  the 
grounds  the  Court,  having  examined  all  the  language  versions  of  Article  8,  mentioned  only 
the condition that “transportation must be effected personally by the purchaser of the products 
subject to duty”. 

3.4.1.2.  Non-commercial movements 

Context 

Article  23(3)  of  Directive  92/12/EEC  states  that  the  provisions  on  excise  duty  laid  down  in 
the following Directives shall cease to apply on 31 December 1992: 

–  Council Directive 74/651/EEC on the tax reliefs to be allowed on the importation of goods 

in small consignments of a non-commercial character within the Community;7 

–  Council Directive 83/183/EEC on tax exemptions applicable to permanent imports from a 

Member State of the personal property of individuals;8 

–  Council Directive 68/297/EEC on the standardisation of provisions regarding the duty-free 

admission of fuel contained in the fuel tanks of commercial motor vehicles.9 

6 
7 
8 
9 

European Court Reports 1998, I-01605. 
OJ L 354 of 30.12.1974, p. 57. 
OJ L 105 of 23.4.1983, p. 64. 
OJ L 175 of 23.7.1968, p. 15. 

18 

 
 
  
 
                                                 
These  provisions  were  repealed  so  that  excisable  products  not  moved  in  a  commercial 
transaction  should  no  longer  be  subject  to  administrative  surveillance  since,  following 
establishment  of  the  single  market  and  application  of  the  principle  that  duty  is  paid  in  the 
Member State of acquisition, such products may now move freely within the Community. 

Difficulties encountered 

This  question  of  freedom  of  movement  has  been  raised  on  three  occasions  in  the  Excise 
Committee: 

–  in January 1993, four Member States reported that they required payment of excise duty on 

presents sent by post to private individuals; 

–  in January 1999, four Member States reported that, when a private individual moved house 
and  took  his  excisable  products  with  him,  the  requirement  to  pay  excise  duty  in  the 
Member  State  of  destination  could  only  be  waived  if  the  individual  himself  moved  his 
household effects (application of Article 8 of Directive 92/12/EEC); 

–  in  July  2000,  the  question  of  presents  sent  to  private  individuals  was  raised  again.  As  in 
January  1993,  four  Member  States  reported  that  they  charged  duty  on  gifts  to  private 
individuals. These States particularly emphasised the fact that it was difficult to verify the 
non-commercial nature of such consignments and that Directive 92/12/EEC contained no 
provisions expressly exempting such consignments from the obligation to pay excise duty 
in the Member State of destination. 

In the Member States concerned, the above interpretations mean that duty is always charged 
in  the  Member  State  of  destination  on  consignments  of  a  non-commercial  nature  sent  to 
private  individuals.  Citizens  of  some  Member  States  therefore  now  find  themselves  at  a 
greater disadvantage than before establishment of the single market in that the tax treatment to 
which they are now subject is less favourable than that applied to similar imports from non-
Community countries. 

The  cases  described  below  are  given  as  examples  of  situations  in  which,  in  principle,  no 
further excise duty is chargeable: 

a) 

b) 

products  sent  as  small  consignments  of  a  non-commercial  nature  by  one 
individual to another established in another Member State. Such products have 
to be for the sole use of the consignee and/or his family. They also have to be 
sent free of any sort of direct or indirect payment in return. 

the  transfer  from  one  Member  State  to  another  of  goods  intended  for  the 
personal  use  of  an  individual  and/or  his  family  (e.g.,  alcoholic  beverages 
produced  by  the  family  and  intended  for  a  member  of  the  family  resident  in 
another Member State). 

c) 

excisable products carried as a consequence of an individual changing his usual 
place of residence or to furnish a secondary residence. 

d) 

excisable products given as a wedding present. 

e) 

excisable products acquired by inheritance. 

19 

 
 
  
 
3.4.1.3.  Cross-border trade 

Since the elimination of tax frontiers between Member States a citizen may acquire excisable 
products for personal use in a Member State other than his own without having to pay excise 
duty  in  the  Member  State  where  he  is  resident.  This  is  the  consequence  of  the  principle  of 
freedom of movement resulting from the establishment of the single market. 

Because excise rates are not harmonised across the Community, citizens understandably apply 
the  freedom  of  movement  principle  and  take  full  advantage  of  the  differences  between  tax 
rates resulting from lack of harmonisation. Such application of the principle explains the large 
volume of excisable products moved between certain Member States. 

However, it causes great concern to the Member States that apply much higher rates of excise 
duty than those in force in their neighbouring Member States, the main problem being how to 
distinguish between commercial and private movements. 

3.4.2.  Opinion 

When  deciding  whether  Article  8  is  relevant,  it  should  be  remembered  that,  under  the 
principle  governing  the  single  market,  all  products  carried  within  the  Community  by 
individuals  for  their  own  use  are  subject  to  taxation  solely  in  the  Member  State  where  the 
products are acquired. 

The present wording of Article 8 waters down or might appear to water down this principle. 
The phrase used is products “transported by the private individuals themselves”. Here it has to 
be remembered that the original Commission proposal did not include any specific provisions 
on the movement of excisable products by private individuals since these had no place in a 
draft directive concerned only with the movement of such products for commercial purposes. 
However,  in  the  absence  of  any  real  harmonisation  of  rates  of  duty,  the  Member  States 
requested  the  addition  in  Directive  92/12/EEC  of  a  provision  which,  at  first  sight,  could  be 
interpreted as restricting application of the general principle of the free movement of goods to 
goods carried by private individuals themselves. 

Products transported on behalf of private individuals 

Under Article 8 as currently worded and interpreted by the Court, the principle applies only 
when  excisable  products  are  transported  personally  by  the  buyer.  If  the  buyer  does  not 
personally  accompany  the  products,  the  excise  duties  are  chargeable  again  in  the  Member 
State of destination. This restriction on private individuals' right to buy goods in one Member 
State  and,  having  paid  taxes  on  them  in  that  Member  State,  to  transport  them  to  another 
without being taxed again, runs counter to the general rule for VAT, whereby VAT is payable 
in  the  Member  State  of  destination  only  on  distance  sales  (where  goods  are  dispatched  or 
transported by or on behalf of the vendor). However, VAT on distance purchases (where the 
goods  are  dispatched  or  transported  by  or  on  behalf  of  the  buyer)  is  always  payable  in  the 
Member State of departure, even when the goods are subject to excise duties. 

In the Commission’s view it is no longer justifiable to restrict the general principle governing 
the single market in this way. It therefore proposes, in line with the principle applied to VAT, 
that all movements of products intended for the personal use of private individuals carried out 
by  or  on  behalf  of  a  private  individual  should  by  virtue  of  their  non-commercial  nature  be 
subject to taxation in the Member State only in the Member State of acquisition. 

20 

 
 
  
 
However, an exception has to be made in the case of tobacco products because, if applied to 
these products, the above principle would inter alia contradict the health policy advocated in 
Article  152  of  the  Treaty  in  particular.  In  view  of  that  policy  and  of  the  World  Health 
Organisation’s Framework Convention on Tobacco,10 which calls for “tax policies and, where 
appropriate, price policies, on tobacco products so as to contribute to the health  objectives 
aimed  at  reducing  tobacco  consumption”,  the  Commission  proposes  that,  for  all  excisable 
products  other  than  tobacco  products  physically  carried  by  the  private  individual  himself  or 
moved from one private individual to another and intended for the personal use of the private 
individual  to  whom  they  are consigned,  excise  duty  should  be  paid  in  the  Member  State  of 
destination. This will ensure that any measures introduced by Member States to comply with 
the conclusions of the above Framework Convention will not be compromised by the fact that 
private individuals are free to purchase tobacco products in Member States where prices are 
lower than in the one where they reside. 

In the proposal for a Directive, a second subparagraph is added to Article 8, which clearly 
states that the principle set out in the first subparagraph also applies to products, other than 
manufactured tobacco, transported on behalf of a private individual. 

Non-commercial movements referred to at point 3.4.1.2. 

With  regard  to  the  non-commercial  movements  referred  to  at  point  3.4.1.2,  some  Member 
States want to apply a restrictive interpretation of the free movement of products acquired by 
private individuals. The Commission has frequently issued reminders that the emphasis of the 
provisions of Article 8 is on movements made for non-commercial purposes but that, subject 
to compliance with the above-mentioned principle governing the single market, it could also 
cover other situations. In particular it could be taken to cover the non-commercial movement 
of  excisable  products  by  private  individuals  (e.g.  in  the  course  of  removals  or  gifts).  A 
restrictive  interpretation  of  Article  8  in  this  context  suggests  that  such  non-commercial 
movements may not be exempted from excise duty in the Member State of destination unless 
the products are physically carried by the private individuals for whom they are intended. As 
a consequence movements which, subject to certain conditions, were exempt from duty before 
establishment  of  the  single  market  are  now  taxed  -  which  completely  contradicts  the 
principles of the single market. 

In the proposal for a Directive, a third sub-paragraph is added to Article 8 stating that the 
principle  set  out  in  Article  8(1)  also  applies  when  products  are  sent  from  one  private 
individual  to  another,  without  any  payment,  direct  or  indirect  (as  when  a  gift  is  sent,  for 
example).  The  other  situations  referred  to  at  point  3.4.1.2  are  covered  by  the  second 
subparagraph  of  Article  8  since  these  involve  products  transported  on  behalf  of  a  private 
individual. 

Products for purposes other than for own use of private individuals 

For the remaining excisable products purchased by private individuals, transported by them or 
on behalf of them but for purposes other than their own use, excise duties must be collected in 
the  Member  State  of  destination.  At  present,  the  Directive  does  not  expressly  state  what 
procedure  private  individuals  should  follow  to  do  this  legitimately.  Nor  does  it  clearly 
establish the right to have the excise duties paid in the Member State of purchase refunded. 

10 

The Convention was adopted by the World Health Assembly on 21 May 2003 and was signed by the 
European Community on 16 June 2003. 

21 

 
 
  
 
                                                 
To make the rules clearer, the Directive should: clearly state that the excise duties are payable 
in the Member State of destination; identify the person to whom they are chargeable and lay 
down  the  procedures  that  person  has  to  follow.  It  makes  sense  for  the  excise  duties  to  be 
charged to the private individual who transports the goods, or who has them transported. As 
far as the procedure is concerned, movements of this kind should be treated in the same way 
as the movements referred to in Article 7. 

In the proposal for a Directive, a second subparagraph is added to Article 7(1) stating that 
all  purposes  other  than  private  individuals’  own  use  should  count  as  commercial  purposes. 
The procedures referred to by Article 7(4) and the second subparagraph of Article 7(5) would 
then apply to the holding of products acquired by a private individual for purposes other than 
his own use and the refunding of the excise duty in the Member State of departure would be 
possible under Article 7(6). 

Guide levels 

It  is  recorded  in  the  Council  Minutes  on  the  Directive  that  it  is  for  private  individuals 
introducing more than a certain quantity of excisable products to prove to the satisfaction of 
the  administration  that  the  products  are  for  his  own  use.  The  Commission  does  not  think  it 
advisable  to  incorporate  this  into  the  new  legal  instrument.  Whenever  a  private  individual 
brings excisable products into a Member State, the administration has to examine the situation 
in  the  light  of  at  least  all  the  criteria  set  out  in  Article  9(2)  before  deciding  whether  the 
products are being held for commercial purposes. As such a decision is likely to be contested 
in  court,  the  administrations  have  to  base  their  decisions  on  actual  facts,  not  on  mere 
supposition.  

As it would not be legal to envisage reversal of the burden proof, retaining the guide levels 
laid down in the present Article 9(2) is no longer justified. In any case an administration may 
never  use  these  levels  on  their  own  as  evidence  that  excisable  products  are  being  held  for 
commercial  purposes.  Neither  may  these  levels  ever  be  interpreted  as  tax-free  “thresholds” 
since,  if  the  administration  of  the  Member  State  carrying  out  checks  wants  to  classify  a 
consignment exceeding these levels as commercial, it must have solid facts to hand on which 
to base such a conclusion. 

The  guide  levels  should  therefore  be  seen  simply  as  guidelines  given  to  officials  by  their 
administration  which  may  recommend  that  checks  should  not  be  carried  out  on  private 
individuals  unless  these  are  carrying  in  excess  of  a  given  amount  of  excisable  products. 
However,  as  such  recommendations  lie  solely  within  the  jurisdiction  of  the  Member  States, 
they should not be included in the legal instrument that is the Directive.  

Under the new Article 9(2) in the proposal for a Directive, it is no longer possible to apply 
guide levels. 

3.5. 

Article 9 

Article  9(1)  repeats  the  general  principle  governing  taxation  already  set  out  in  Article 7(1), 
whilst at the same time requiring that, in addition to the situation covered by Articles 7 and 8, 
excise duty is due in the Member State in which the products are being held for commercial 
purposes and is payable by the person holding the products. 

Article 9(2) sets out the minimum criteria which have to be taken into account to determine 
whether the products referred to in Article 8 are intended for commercial purposes. 

22 

 
 
  
 
3.5.1. 

Importance of Article 9(1) 

Difficulties encountered 

The  wording  of  Article  9(1)  and  Article  7(1)  is  similar  except  for  the  fact  that  Article  9(1) 
lays down that excise duty is chargeable to the holder of the products. 

Opinion 

As  stated  above  at  point  3.2.,  Article  9(1)  should  no  longer  state  when  duty  becomes 
chargeable since it merely repeats what is already stated in Article 7. Since under the current 
Article  9  the  duty  is  chargeable  to  the  holder  in  the  situations  covered  by  that  Article,  a 
subparagraph  should  be  added  to  Article  7(3)  stating  that,  unless  it  is  expressly  stated  to 
whom  the  duty  should  be  charged,  it  should  be  charged  to  the  holder  of  the  products.  The 
situations  in  question  concern,  inter  alia,  products  held  by  private  individuals  for  purposes 
other than their own use or products held by traders of bodies governed by public law who 
have not complied with the proposed Article 7(5). 

3.5.2.  Criteria  to  be  applied  when  determining  whether  a  movement  is  carried  out  for 

commercial purposes 

Difficulties encountered 

Article  9(2)  lays  down  all  the  factors  that  have  to  be  taken  into  account  when  establishing 
whether a product acquired by a private individual is of a commercial nature and whether duty 
may therefore be levied in the Member State where the product is held. 

The main problem lies in the criterion for guide levels. Whilst Article 9(2) simply mentions 
“guide  levels”  as  one  of  the  factors  to  be  taken  into  consideration  in  the  process  of 
determining  whether  a  private  individual  is  liable  for  duty  on  a  given  movement,  the  guide 
levels are often regarded as legal thresholds which allow them to handle movements carried 
out by private individuals as follows: 

–  up to and including the guide levels: the national administration has to demonstrate that the 

products have been acquired by the private individual for commercial purposes; 

–  above the guide levels: the private individual has to demonstrate to the satisfaction of the 
administration carrying out the checks that the products really are for the individual’s own 
use. 

As can be seen from the large number of complaints the Commission receives on this matter, 
many European citizens consider reversing the burden of proof in this way to be contrary to 
the  general  principles  of  the  Treaty.  On  the  basis  of  these  complaints,  the  Commission  has 
started  infringement  proceedings  against  certain  Member  States  which  have  reversed  the 
burden  of  proof.  This  has  prompted  the  Member  States  in  question  to  take  a  different 
approach. 

Opinion 

As  already  explained  in  point  3.4.2,  the  Commission  does  not  believed  there  is  any 
justification for retaining the guide levels in Article 9(2). The provision should otherwise be 
kept unchanged, except for the introductory phrase. This has been brought into line with the 
new wording  of  Article 8(1) to Article  8(4) and now covers products  intended  for  purposes 

23 

 
 
  
 
other  than  private  individuals’  own  use  rather  than  products  intended  for  commercial 
purposes.  The  new  version  should  eliminate  any  uncertainty  as  to  the  status  of  certain 
categories  of  holding  products,  which  cannot  be  classed  as  “commercial”  but  where  the 
products are not intended for private individuals’ own use. 

The second subparagraph of Article 9(2), which allows the Member States to set guide levels, 
has been dropped from the proposal for a Directive. 

3.5.3.  Atypical modes of transport (Article 9(3)) 

Difficulties encountered 

When  the  Directive  was  being  discussed  in  Council  the  Member  States  expressed  concern 
about  safety  in  connection  with  moving  mineral  oils  and  about  the  fact  that  failure  to 
harmonise  excise  rates,  particularly  for  mineral  oils,  could  encourage  private  individuals  to 
buy such products (particularly heating fuel) in a Member State where the rate was low and 
then move the products back home themselves.  

The optional provision in Article 9(3) should be seen as one under which Member States may 
introduce tax provisions tantamount to a general prohibition on using any mode of transport 
other than one that is duly licensed for moving mineral oils. To summarise: 

–  all  "authorised"  movements,  i.e.  those  carried  out  for  commercial  purposes  by  a 

professional trader, are subject to excise duty in the Member State of destination; 

–  quite apart from any fines that may apply in connection with transport safety, all "atypical" 
modes of transport used are also subject to excise duty in the Member State of destination. 

This means that Member States may exclude mineral oils from the scope of Article 8. 

In  other  words,  private  individuals  moving  mineral  oils  −  particularly  heating  fuel  −  under 
conditions identical to those permitted for other excisable products do not benefit from the tax 
freedom applicable to those other products (i.e. the freedom to pay duty solely in the Member 
State of departure). The whole question of using a tax instrument to regulate transport safety 
still needs to be examined. 

Opinion 

The Commission is not convinced of the need to retain a measure which derogates from the 
general  principle  that  private  individuals  are  free  to  move  goods.  If  there  is  a  problem 
regarding the safe carriage of mineral oils, a provision exempting those concerned from the 
scope of the above Article is unlikely to provide a satisfactory legal solution. 

There  is  no  fiscal  justification  for  introducing  provisions  whose  sole  purpose  is  to  dissuade 
private  individuals  from  moving  mineral  oils.  Therefore  the  tax  principle  by  which  excise 
duty on excisable products carried by private individuals must always be paid in the Member 
State  where  the  goods  were  acquired  must  be  applied  in  full  to  mineral  oils.  The  fact  that 
national and Community legislation makes the carriage of mineral oils subject to very strict 
safety  regulations  must  be  wholly  dissociated  from  the  principle  governing  the  taxation  of 
such movements. If the two are not so separated, an offence might be established, but the fact 
that it was would never affect the excise duty. 

24 

 
 
  
 
The  provisions  of  the  present  Article  9(3)  are  no  longer  included  in  the  proposal  for  a 
directive. 

3.6. 

Article 10 

Article  10  establishes  the  principle  that  excise  duty  on  distance  sales  is  due  in  the  Member 
State of destination. 

The payment procedure laid down in that Article requires the vendor, or his tax representative 
where applicable, to pay the excise duty. 

There  are  therefore  two  distinct  procedures  for  paying  excise  duty  in  the  Member  State  of 
destination: the first for payments made by the vendor himself and the second for payments 
made by the vendor’s tax representative. 

The Member State in which the vendor is established must ensure that the vendor or his tax 
representative:  

–  guarantees  payment  of  excise  duty,  prior  to  dispatch  of  the  products,  in  accordance  with 

the conditions set by the Member State of destination; 

–  ensures that the excise duty is paid following the arrival of the products; 

–  keeps records of deliveries of products. 

3.6.1.  Movements of products intended for the exclusive use of a private individual 

Difficulties encountered 

No  reading  of  Article  10  permits  the  conclusion  that  its  provisions  apply  solely  to  the 
movement of products intended for private individuals. What is more, the distinction between 
Article 7 and Article 10 is not clear. The only difference in the wording of the two Articles 
would appear to be that, in Article 10, the products are carried “directly or indirectly by the 
vendor or on his behalf”. However, this is also the situation set out in Article 7. 

Opinion 

The wording of Article 10 does not identify clearly what movements are meant. The original 
intention of the legislator - namely to lay down procedures for the sale by a foreign vendor of 
goods intended for a private individual established in another Member State - was not made 
sufficiently clear.  

In  the  proposal  for  a  directive,  Article  10(1)  makes  it  clear  that  the  new  Article  covers  the 
sale of products to a private individual by a vendor who is directly or indirectly responsible 
for the transport of the products. 

3.6.2.  Vendor’s obligations 

Difficulties encountered 

Traders generally consider the current procedure rather unsatisfactory. Their main difficulties 
are: 

25 

 
 
  
 
–  The procedures with which they have to comply are not harmonised. Each Member State 
decides independently what procedures to impose for lodging guarantees and paying excise 
duty. Vendors therefore have to comply with rules which differ from one Member State to 
the next and this causes difficulties. 

–  It is difficult to comply with the procedure which requires a guarantee to be lodged before 
the corresponding products are dispatched because, in practice, this would mean a vendor 
having  to  travel  physically  to  the  Member  State  of  destination  before  the  products  are 
dispatched to that State. 

The Directive allows Member States the option of requiring excise duty to be paid by a tax 
representative,  but  is  otherwise  silent  on  the  obligations  of  that  representative  and  the 
formalities  to  be  completed.  It  is  therefore  left  to  the  Member  States  themselves  to  decide 
what  these  obligations  and  formalities  shall  be.  Consequently  the  procedures  differ 
substantially from one Member State to the next and cause traders even greater confusion. 

Most  Member  States  elected  to  apply  the  option  requiring  excise  duty  to  be  paid  by  a  tax 
representative  because,  unlike  the  vendor,  the  representative  is  established  in  the  Member 
State of destination and therefore has to comply with the tax laws applicable in that State. 

However, traders did not find this satisfactory because keeping a tax representative costs them 
extra. Vendors consider this financial burden disproportionate to sales actually made. 

Opinion 

Where  tax  representatives  are  mandatory  in  a  Member  State  of  destination,  the  obligations 
they have to fulfil vary widely. In some Member States the representative has to be approved 
by the administration but is still required to lodge a guarantee. 

The  very  concept  of  tax  representative  is  interpreted  very  differently  in  different  Member 
States  so  that  the  representative’s  obligations  also  differ.  Also,  the  cost  to  a  trader  of 
appointing a tax representative is not negligible since the representative will not take on the 
vendor’s obligations unless he is paid to do so. 

All this is perceived as restrictive and cumbersome, particularly by small and medium-sized 
businesses. The procedure needs to be simplified. 

Here it would be appropriate to mention a pilot project, conducted by France and Belgium, in 
which  the  obligation  to  appoint  a  tax  representative  was  dropped.  The  two  Member  States 
established a procedure which both facilitates the payment of excise duty at destination and 
enables  the  Member  States’  administrations  to  monitor  movements  of  excisable  products 
more  closely.  The  procedure  authorises  a  foreign  vendor  to  lodge  a  guarantee  covering  all 
movements he effects into the other Member State at a central office in that Member State. 
Duty  is  then  paid  on  the  basis  of  information  exchanged  between  the  Member  State  of 
departure and the Member State of destination.  

Article 10(3) of the proposal for a Directive includes all the simplified procedures tried out in 
the pilot project run by Belgium and France. Furthermore the wording of the Article has been 
simplified. Paragraphs 1 and 2 in the current version have been run together to form a single 
paragraph. The new paragraph 2 specifies when the excise duty becomes chargeable. Lastly, 
the phrases “subject to Community law” and “compatible with the Treaty” have been deleted 
from paragraph 5. 

26 

 
 
  
 
3.6.3.  Non-existence of an accompanying administrative document 

Difficulties encountered 

Another big difference between the old procedure and the one proposed in Article 7 is that no 
accompanying  administrative  document  is  required  as  the  Council  considered  that  private 
individuals could not be required to comply with the discharge procedure. 

In practice the Member States are against excisable products intended for sale being moved 
without an accompanying administrative document because this makes it more complicated to 
check whether the movement was completed in accordance with the rules. 

Opinion 

The  new  procedure  for  distance  sales  (see  point  3.6.2)  requires  a  vendor  to  write  on  the 
commercial  documents  accompanying  his  consignment  the  references  for  the  authorisations 
he  has  been  granted  by  both  the  Member  State  of  departure  and  that  of  destination  (the 
authorisations  implying  that  a  guarantee  has  been  lodged  with  a  central  office).  It  will 
therefore be easy to check whether the movement has been completed in accordance with the 
rules. 

3.6.4.  Carriage arranged by the private individual 

Difficulties encountered 

Article 10 has nothing specific to say about the movement of products purchased by private 
individuals who then arrange for carriage without any direct or indirect input by the vendor. 
The  principle  that  excise  duty  must  be  paid  at  destination  is  therefore  not  clearly  stated  in 
Article 10. 

On  the  basis  of  this  “legal  loophole”  some  traders  have  concluded  that  duty  on  such 
movements is payable only in the Member State where the excisable products are purchased. 
But this contradicts the provisions of Article 8 which require duty to be paid in the Member 
State where the products are acquired, but only on condition that the excisable products are 
acquired by private individuals for their own use and moved by them. 

Opinion 

Liberalising  movements  of  excisable  products  effected  by  private  individuals  or  on  their 
behalf will provide a satisfactory response to the current problem. Tobacco products are not 
covered by the liberalisation measures for the reasons given at point 3.4.2 under the heading 
“Products transported on behalf of private individuals”. 

27 

 
 
  
 
4. 

CONCLUSIONS 

Ten  years  have  gone  by  since  the  single  market  was  established  and,  therefore,  since  the 
provisions of Articles 7 to 10 of Directive 92/12/EEC entered into force. Whilst it is true that 
the  type  of  intra-Community  movement  covered  by  these  provisions  represents  only  a  very 
small  proportion  of  total  intra-Community  movements  of  excisable  products,  it  must 
nevertheless be stressed that this  type  of  movement  mainly involves private individuals  and 
small traders without substantial financial resources and no commercial infrastructure. 

Such parties are particularly aware of the opportunities the single market should open up for 
them  but,  as  is  clear  from  the  problems  described  in  point  4,  they  are  finding  it  difficult  to 
comply  with  the  implementing  procedures  of  Articles  7  to  10,  or  even  to  understand  the 
reasons underlying the taxation principles reflected in these Articles. 

It has to be said that the present wording of Articles  7 to 10 has allowed the application of 
national interpretations which, depending on the Member State, are framed more liberally or 
more restrictively than the provisions of those Articles. The Commission considers that this is 
not  entirely  attributable  to  any  difficulty  over  how  to  read  the  Articles  but  due,  rather,  to  a 
protectionist  reaction  on  the  part  of  some  Member  States  which,  in  order  to  protect  income 
accruing  to  their  national  budgets,  seek  as  far  as  possible  to  restrict  the  free  movement  of 
goods brought about by the single market. 

Consequently, although it was possible to achieve a common interpretation of Articles 7 to 10 
of  the  Directive  through  the  case  law  of  the  Court,  the  Commission  considers  that  it  is  the 
responsibility of the legislator, i.e. the Council, to provide the requisite solutions. A proposal 
for  amending  the  Directive  has  therefore  been  drafted  (see  the  proposal  for  a  Directive 
annexed to this report). The amendment is based on the same principles as those underlying 
the present Articles, namely: 

–  that excise duty must be paid in the Member State of destination when excise products are 

moved for commercial purposes; and 

–  the general principles governing the single market, i.e. that excise duty on products moved 
for non-commercial purposes by private individuals should always be paid in the Member 
State where the goods were acquired.  

Apart  from  the  above  proposal,  the  Commission  considers  that  Commission  Regulation 
(EEC) No 3649/92 should also be amended to take account of the problems of reimbursement 
described  in  Chapter  4.  A  draft  proposal  setting  out  amendments  to  that  instrument  is  also 
annexed. 

28 

 
 
  
 
ANNEX 1 

Articles 7 to 10 of the existing Directive 92/12/EEC 

Article 7 

1. In the event of products subject to excise duty and already released for consumption in one 
Member State being held for commercial purposes in another Member State, the excise duty 
shall be levied in the Member State in which those products are held. 

2.  To  that  end,  without  prejudice  to  Article  6,  where  products  already  released  for 
consumption as defined in Article 6 in one Member State are delivered, intended for delivery 
in  another  Member  State  or  used  in  another  Member  State  for  the  purposes  of  a  trader 
carrying  out  an  economic activity  independently or for the purposes  of a body governed by 
public law, excise duty shall become chargeable in that other Member State. 

3.  Depending  on  all  the  circumstances,  the  duty  shall  be  due  from  the  person  making  the 
delivery  or  holding  the  products  intended  for  delivery  or  from  the  person  receiving  the 
products for use in a Member State other than the one where the products have already been 
released for consumption, or from the relevant trader or body governed by public law. 

4. The products  referred  to in  paragraph 1 shall move between the  territories of the  various 
Member  States  under  cover  of  an  accompanying  document  listing  the  main  data  from  the 
document  referred  to  in  Article  18  (1).  The  form  and  content  of  this  document  shall  be 
established in accordance with the procedure laid down in Article 24 of this Directive. 

5.  The  person,  trader  or  body  referred  to  in  paragraph  3  must  comply  with  the  following 
requirements: 

a) 

b) 

c) 

before the goods are dispatched, make a declaration to the tax authorities of the 
Member State of destination and guarantee the payment of the excise duty; 

pay the excise duty of the Member State of destination in accordance with the 
procedure laid down by that Member State; 

consent  to  any  check  enabling  the  administration  of  the  Member  State  of 
destination to satisfy itself that the goods have actually been received and that 
the excise duty to which they are liable has been paid. 

6.  The  excise  duty  paid  in  the  first  Member  State  referred  to  in  paragraph  1  shall  be 
reimbursed in accordance with Article 22 (3). 

7. Where products subject to excise duty and already released for consumption in a Member 
State  are  to  be  moved  to  a  place  of  destination  in  that  Member  State  via  the  territory  of 
another  Member  State,  such  movements  shall  take  place  under  cover  of  the  accompanying 
document referred to in paragraph 4 and shall use an appropriate itinerary. 

29 

 
 
  
 
 
8. In the cases referred to in paragraph 7: 

a) 

b) 

c) 

the consignor shall, before the goods are dispatched, make a declaration to the 
tax  authorities  of  the  place  of  departure  responsible  for  carrying  out  excise-
duty checks; 

the consignee shall attest to having received the goods in accordance with the 
rules laid down by the tax authorities of the place of destination responsible for 
carrying out excise-duty checks; 

the  consignor  and  the  consignee  shall  consent  to  any  check  enabling  their 
respective  tax  authorities  to  satisfy  themselves  that  the  goods  have  actually 
been received. 

9.  Where  products  subject  to  excise  duty  are  moved  frequently  and  regularly  under  the 
conditions  specified  in  paragraph  7,  Member  States  may  agree  bilaterally  to  authorise  a 
simplified procedure in derogation from paragraphs 7 and 8. 

Article 8 

As  regards  products  acquired  by  private  individuals  for  their  own  use  and  transported  by 
them, the principle governing the internal market lays down that excise duty shall be charged 
in the Member State in which they are acquired. 

Article 9 

1.  Without  prejudice  to  Articles  6,  7  and  8,  excise  duty  shall  become  chargeable  where 
products  for  consumption  in  a  Member  State  are  held  for  commercial  purpose  in  another 
Member State. 

In this case, the duty shall be due in the Member State in whose territory the products are and 
shall become chargeable to the holder of the products. 

2. To establish that the products referred to in Article 8 are intended for commercial purposes, 
Member States must take account, inter alia, of the following: 

–  the commercial status of the holder of the products and his reasons for holding them, 

–  the place where the products are located or, if appropriate, the mode of transport used, 

–  any document relating to the products, 

–  the nature of the products, 

–  the quantity of the products. 

For the purposes of applying the content of the fifth indent of the first subparagraph, Member 
States may lay down guide levels, solely as a form of evidence. These guide levels may not be 
lower than: 

30 

 
 
  
 
a) Tobacco products 

–  cigarettes 800 items 

–  cigarillos (cigars weighing not more than 3 g each) 400 items  

–  cigars 200 items 

–  smoking tobacco 1.0 kg 

b) Alcoholic beverages 

–  spirit drinks 10 l 

–  intermediate products 20 l 

–  wines (including a maximum of 60 l of sparkling wines) 90 l  

–  beers 110 l 

Until  30  June  1977 Ireland  shall be authorised to apply guide levels which may not  be  less 
than 45 litres for wine (including a maximum of 30 litres of sparkling wine) and 55 litres for 
beer. 

3. Member States may also provide that excise duty shall become chargeable in the Member 
State of consumption on the acquisition of mineral oils already  released for consumption in 
another Member State if such products are transported using atypical modes of transport by 
private  individuals  or  on  their  behalf.  Atypical  transport  shall  mean  the  transport  of  fuels 
other than in the tanks of vehicles or in appropriate reserve fuel canisters and the transport of 
liquid heating products other than by means of tankers used on behalf of professional traders. 

Article 10 

1.  Products  subject  to  excise  duty  purchased  by  persons  who  are  not  authorised  warehouse 
keepers  or  registered  or  non-registered  traders  and  dispatched  or  transported  directly  or 
indirectly by the vendor or on his behalf shall be liable to excise duty in the Member State of 
destination.  For  the  purposes  of  this  Article,  ‘Member  State  of  destination’  shall  mean  the 
Member State of arrival of the dispatch or transport. 

2.  To  that  end,  the  delivery  of  products  subject  to  excise  duty  already  released  for 
consumption in a Member State and giving rise to the dispatch or transport of those products 
to a person as referred to in paragraph 1, established in another Member State, and which are 
dispatched  or  transported  directly  or  indirectly  by  the  vendor  or  on  his  behalf  shall  cause 
excise duty to be chargeable on those products in the Member State of destination. 

3. The duty of the Member State of destination shall be chargeable to the vendor at the time of 
delivery. However, Member States may adopt provisions stipulating that the excise duty shall 
be  payable  by  a  tax  representative,  other  than  the  consignee  of  the  products.  Such  tax 
representative must be established in the Member State of destination and approved by the tax 
authorities of that Member State. 

The Member State in which the vendor is established must ensure that he complies with the 
following requirements: 

31 

 
 
  
 
–  guarantee  payment  of  excise  duty  under  the  conditions  set  by  the  Member  State  of 
destination  prior  to  dispatch  of  the  products  and  ensure  that  the  excise  duty  is  paid 
following arrival of the products; 

–  keep accounts of deliveries of products. 

4. In the case referred to in paragraph 2, the excise duty paid in the first Member State shall 
be reimbursed in accordance with Article 22 (4). 

5. Subject to Community law, Member States may lay down specific rules for applying this 
provision to products subject to excise duty which are covered by special national distribution 
arrangements compatible with the Treaty. 

32 

 
 
  
 
EXPLANATORY MEMORANDUM 

The report from the Commission to the European Parliament, the Council and the Economic 
and  Social  Committee  on  the  application  of  Articles  7  to  10  of  Directive  92/12/EEC11 
concludes  that  some  of  the  provisions  of  these  Articles  should  be  clarified  to  ensure 
unambiguous understanding of the tax rules and procedures set out therein. 

The  Commission  therefore  proposes  amending  the  provisions  on  excisable  products  already 
released  for  consumption  in  one  Member  State  and  then  moved  to  a  destination  in  another. 
This  amendment  is  based  on  the  same  principles  as  those  applied  when  Directive 
1992/12/EEC was adopted, namely: 

–  that excise duty must be paid in the Member State of destination when excise products are 

moved for commercial purposes; and 

–  the general principles governing the single market, i.e. that excise duty on products moved 
for non-commercial purposes by private individuals should always be paid in the Member 
State where the goods were acquired. 

COMMENTS ON THE PROPOSED MEASURES 

Article 1 - Amendments to Directive 92/12/EEC 

1) Amendment of Article 7 

a) Amendment of Article 7(1) 

The first of the proposed subparagraphs sets out the principle laid down in the current text of 
Article 7 that where products already released for consumption in one Member State are held 
for commercial purposes in another, the excise duty should be collected in the Member State 
in which they are being held. However, the wording is simplified. 

A second subparagraph is added to indicate that commercial purposes are considered to be all 
purposes  other  than  personal  use  by  private  individuals.  The  procedures  referred  to  in 
paragraphs  4  and  5,  second  subparagraph,  are  thus  explicitly  made  applicable  to  excisable 
products  held  by  private  individuals  for  purposes  other  than  their  personal  use,  and 
reimbursement of the excise duty in the Member State of departure is explicitly made possible 
under paragraph 6. At present the Directive makes no express provision for the procedure to 
be  followed  by  private  individuals  wishing  to  carry  out  such  transactions  legitimately.  It 
makes sense for the excise to be charged to the private individual who transports the products 
or  has  them  transported.  In  terms  of  the  procedures  to  follow,  these  movements  should  be 
treated in the same way as the movements referred to in Article 7. 

11 

Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to 
excise duty and on the holding, movement and monitoring of such products (OJ L 76, 23.3.1992, p. 1), 
as last amended by Council Regulation (EC) No 807/2003 of 14 April 2003 (OJ L 122, 16.5.2003, p.36). 

33 

 
 
  
 
                                                 
The  principle  set  out  in  first  subparagraph  fully  applies  to  all  excise  products  sold  in  the 
course  of  journeys  within  the  Community  unless,  as  provided  for  in  Commission  notice 
99/08,12 the products are held on a vessel or aircraft making crossings or flights between two 
Member States and are not available for sale when the vessel or aircraft is in the territory of 
one  of  those  Member  States.  In  such  cases  the  goods  are  not  considered  to  be  held  for 
commercial purposes in that Member State. To eliminate all doubt about the existence of this 
possibility, it should be explicitly indicated in the Directive. To this end a third subparagraph 
is  added  to  paragraph  1  specifying  that  products  held  on  board  a  vessel  or  aircraft  making 
crossings or flights between two Member States but not available for sale when the vessel or 
aircraft  is  in  the  territory  of  one  of  the  Member  States  are  not  deemed  to  be  held  for 
commercial purposes in that Member State. 

b) Amendment of Article 7(2) 

Since Article 7(2) only repeats provisions already covered in paragraphs 1 and 3, it is deleted. 

c) Amendment of Article 7(3) to (9) 

The  present  wording  of  paragraph  3  leaves  a  lot  of  leeway  to  Member  States  regarding  the 
identification  of  persons  from  whom  excise  duty  may  be  due  in  the  Member  State  of 
destination. This flexibility causes some Member States difficulty. The expression “depending 
on the circumstances” gives no definite criteria for establishing whether the excise duty must 
be paid by the consignor, the consignee, or by some other person (the carrier, for instance). 

The proposed paragraph 3 makes a clear distinction between two situations in which excisable 
products are held for commercial purposes in a Member State other than the one where they 
are  released  for  consumption  and  defines  clearly  and  without  ambiguity  the  persons  from 
whom excise duty is due, and who must also complete the formalities set out in paragraph 5, 
in each situation. To solve the difficulties associated with the formalities to be completed at 
destination, the person best placed to carry out those formalities should be designated as the 
excise debtor. 

The first subparagraph of paragraph 3 refers to situations in which products are dispatched to 
the territory of another Member State by a trader not established in that Member State to be 
offered for sale there. This concerns products which, at the moment of entering the territory of 
another Member State, have not yet been the subject of a commercial transaction. The non-
established trader is designated as the excise debtor in this situation. 

The second subparagraph of paragraph 3 refers to situations in which products are used within 
another Member State for the purposes of a trader or body governed by public law. In such 
situations the general rule to apply is that the excise is due from the consignee (trader or body 
governed by public law to whose use the goods are assigned) established in the Member State 
of destination. If, in such cases, the foreign vendor has indicated his intention of paying the 
duty at destination (for example, because he regularly makes deliveries to that Member State 
under  duty-paid  arrangements)  he  can  opt  to  be  come  the  excise  debtor  instead  of  the 
consignee (third subparagraph of paragraph 3). 

12 

Commission notice concerning the VAT and excise rules to be applied from 1 July 1999 by suppliers of 
goods  sold  on  board  ferries  and  aircraft  or  in  airports  to  passengers  travelling  within  the  European 
Union: 1999/C 99/08 (OJ C 99. 10.4.1999, p. 20). 

34 

 
 
  
 
                                                 
In view of the removal of the chargeable event for excise currently provided for in Article 9, a 
fourth subparagraph should be added to Article 7(3) providing that in cases other than those 
referred  to  in  the  first  to  third  subparagraphs,  excise  is  due  from  the  person  holding  the 
products for commercial purposes. This provision replaces the second subparagraph of Article 
9(1), which is deleted (see also the comments at point 3(a) below). 

A  final  amendment  to  paragraph  3  concerns  the  concept  of  the  “trader  carrying  out  an 
economic activity independently”, which the proposed amendment replaces with the concept 
of “trader”, since all traders are concerned by this provision. It  therefore suffices to refer to 
the status of “trader”. 

In paragraph 4, the words “excluding those in respect of which the non-established trader is 
identified  as  the  excise  debtor”  are  added.  This  means  that  the  simplified  accompanying 
document provided for in Commission Regulation (EEC) No 3649/92 of 17 December 199213 
need no longer be used in these situations. Use of this document is replaced by the procedure 
applicable  to  “distance  sales”  provided  for  in  Article  10(3)  which,  while  facilitating 
procedures for paying excise at destination, allows the administrations of the Member States 
concerned to monitor movements more closely. 

Paragraph  5  sets  out  the  obligations  of  the  excise  debtors  defined  in  paragraph  3.  The  first 
subparagraph, which is new, provides that the formalities to be completed by the trader not 
established in the Member State of holding are the same as those applicable to the “distance 
sales”  provided  for  in  Article  10(3).  The  second  subparagraph  sets  out  the  formalities 
currently  provided  for  in  paragraph  5  while  specifying  in  the  first  sentence  that  they  now 
apply only to the situations referred to in the second and fourth subparagraphs of paragraph 3. 

The changes to paragraphs 6, 7 and 8 are purely formal. 

At  present  paragraph  9  authorises  Member  States  to  introduce  simplified  procedures  by 
bilateral agreement where products subject to excise duty are moved frequently and regularly 
from one place in a Member State to another place in the same Member State via the territory 
of  another  Member  State.  Since  these  simplified  procedures  have  no  impact  on  the  general 
taxation principle referred to in paragraph 1, the wording of paragraph 9 is changed to allow 
the use of simple administrative agreements to introduce simplified procedures. This should 
facilitate the conclusion of bilateral agreements between Member States. 

2) Amendments to Article 8 

At  present  Article  8  only  has  one  paragraph.  The  proposal  amends  this  paragraph  and  adds 
two new ones. 

The proposed first paragraph sets out the principle set out in the current version of Article 8, 
but the words “the principle governing the internal market lays down that” are deleted, since it 
is superfluous to refer to a general principle derived directly from the Treaty. 

The present wording of Article 8 refers only to the situation in which transport is carried out 
personally by the person acquiring the excisable products. In the Commission’s view it is no 
longer justifiable to restrict the general principle governing the single market in this way. It 
therefore proposes, in line with the principle applied to VAT, that all movements of products 
intended  for  the  personal  use  of  private  individuals  carried  out  by  or  on  behalf  of  a  private 

13 

OJ L 369, 18.12.1992, p. 17. 

35 

 
 
  
 
                                                 
individual  should  by  virtue  of  their  non-commercial  nature  be  subject  to  taxation  in  the 
Member  State  only  in  the  Member  State  of  acquisition.  To  this  end  the  proposed  second 
paragraph clearly states that the principle set out in the first paragraph also applies to products 
transported  by  third  parties  on  behalf  of  private  individuals,  with  the  exception  of 
manufactured tobacco. The full application of this principle to manufactured tobacco products 
would  be  contrary  to  the  health  policy  provided  for  in  the  Treaty,  in  particular  Article  152, 
and to the World Health Organisation’s Framework Convention on Tobacco Control,14 which 
provides  for  “implementing  tax  policies  and,  where  appropriate,  price  policies,  on  tobacco 
products so as to contribute to the health objectives aimed at reducing tobacco consumption”. 
Consequently excise duty will continue to be chargeable in the Member State of destination 
on  tobacco  products  acquired  from  a  foreign  vendor  and  transported  on  behalf  of  a  private 
individual. 

The  third  paragraph  states  that  the  principle  of  taxation  in  the  Member  State  of  acquisition 
also applies to products dispatched by one private individual to another without any payment, 
direct or indirect (this applies mainly to gifts). This seems necessary to avoid any doubt as to 
how to treat these non-commercial movements. 

3) Amendments to Article 9 

a) Amendment of the first subparagraph of Article 9(1) 

The  first  subparagraph  of  Article  9(1)  provides  that  excise  becomes  chargeable  where 
products released for consumption in one Member State are held for commercial purposes in 
another in circumstances other than those provided for in Articles 6, 7 and 8. It is proposed to 
delete  this  provision,  which  simply  repeats  the  chargeable  event  already  provided  for  in 
Article  7(1),  with  the  sole  difference  that  the  person  from  whom  excise  duty  is  due  is  the 
holder of the products instead of the excise debtors identified in the situations referred to in 
Article 7. To cover the situations currently referred to in Article 9, a subparagraph has been 
added  to  Article  7(3)  stipulating  that  in  cases  other  than  those  for  which  the  person  from 
whom  excise  duty  is  due  is  explicitly  designated,  that  person  shall  be  the  holder  of  the 
products. This may in particular concern goods held by private individuals for purposes other 
than their personal use, or products held by a trader or body governed by public law that has 
not met the requirements set out in the proposed Article 7(5). 

b) Amendment of Article 9(2) 

In the first sentence of paragraph 2, the reference to Article 8 is deleted since this provision is 
intended to set criteria to be taken into account by the competent authorities of Member States 
in all situations in which goods are held in their territories and there are doubts as to whether 
they are held for commercial purposes or for the personal use of private individuals. 

The  second  subparagraph  of  paragraph  2  is  no  longer  included  in  the  proposal.  This 
subparagraph allows Member States to provide guide levels, solely as a form of evidence, for 
establishing that the products referred to in Article 8 are intended for commercial purposes. In 
any  case  an  administration  can  never  use  these  guide  levels  on  their  own  as  evidence  that 
excisable  products  are  being  held  for  commercial  purposes.  Neither  may  they  ever  be 
interpreted as tax-free “thresholds” since, if the administration of the Member State carrying 

14 

This  convention  was  adopted  by  the  World  Health  Assembly  on  21  May  2003  and  signed  by  the 
European Community on 16 June 2003. 

36 

 
 
  
 
                                                 
out  checks  wants  to  classify  a  consignment  as  commercial,  whether  it  falls  short  of  these 
levels or exceeds them, it must have solid facts to hand on which to base such a conclusion. 
The  guide  levels  should  therefore  be  seen  simply  as  guidelines  given  to  officers  by  their 
administration,  which  may  recommend  that  checks  should  not  be  carried  out  on  private 
individuals  unless  these  are  carrying  in  excess  of  a  given  amount  of  excisable  products. 
However,  as  such  recommendations  lie  solely  within  the  jurisdiction  of  the  Member  States, 
they should not be included in the enacting terms of the Directive. 

c) Amendment of Article 9(3) 

Article 9(3) is deleted. The Commission is not convinced of the need to retain a tax provision 
allowing Member States to derogate from the general principle of free movement applicable 
to  movements  carried  out  by  private  individuals.  Although  there  may  be  a  safety  problem 
associated  with  the  transport  of  mineral  oils,  a  provision  derogating  from  that  general 
principle would not provide a satisfactory legal solution to the problem. Any stricter national 
or  Community  rules  that  may  be  applied  to  the  transport  of  mineral  oil  must  be  kept 
completely  separate  from  the  principle  of  the  taxation  to  be  applied  to  such  movement.  If 
there is a failure to comply with certain safety standards, an offence should be recorded, but 
should have no impact on excise duties. 

4) Amendments to Article 10 

The wording of paragraph 1 does not clearly identify the movements it concerns. The original 
intention  of  the  legislator,  which  was  to  introduce  procedures  applicable  to  sales  made  by 
foreign vendors who take responsibility, directly or indirectly, for the transport of products to 
private individuals established in another Member State ("distance sales") is not sufficiently 
highlighted.  In  order  to  make  clear  that  this  provision  refers  to  distance  sales  to  private 
individuals, the words “purchased by persons who are not authorised warehouse keepers or 
registered or non-registered traders” are replaced by the words “purchased by persons acting 
in their capacity as private individuals”. 

Paragraph  2,  which  repeats  the  provisions  of  paragraph  1,  is  deleted.  It  is  replaced  by  a 
provision,  currently  set  out  in  paragraph  3,  specifying  that  the  excise  duty  becomes 
chargeable at the time of delivery of the products. 

Paragraph 3 sets out the obligations of the traders carrying out the transactions referred to in 
paragraph 1. The report states that traders generally consider the current payment procedure 
rather unsatisfactory. Their main difficulties are: 

– 

– 

– 

the  procedures  with  which  they  have  to  comply  are  not  harmonised;  each  Member 
State  decides  independently  what  procedures  to  impose  for  lodging  guarantees  and 
paying excise duty; 

it is difficult to comply with the procedure which requires a guarantee to be lodged 
before the corresponding products are dispatched, since in practice this would mean a 
vendor  having  to  travel  physically  to  the  Member  State  of  destination  before 
dispatching the products; 

appointing  a  tax  representative,  which  most  Member  States  require,  places  an 
additional financial burden on vendors, which they consider disproportionate to the 
sales made; and 

37 

 
 
  
 
– 

the  very  concept  of  tax  representative  is  interpreted  very  differently  in  different 
Member States so that the representative's obligations are also likely to vary. 

Since all this is perceived as restrictive and cumbersome, particularly by small and medium-
sized  businesses,  the  procedure  provided  for  in  paragraph  3  is  replaced  by  a  simplified 
procedure.  This  facilitates  the  payment  of  excise  duty  in  the  Member  State  of  destination 
while allowing that Member State’s administration to monitor movements more closely. The 
right of the Member State of destination to require the appointment of a tax representative has 
not been retained. 

Paragraph  4  no  longer  refers  to  paragraph  2,  but  to  paragraph  1  because  of  the  proposed 
amendments to paragraphs 1 and 2. 

In paragraph 5 the words "subject to Community law" and “compatible with the Treaty” have 
been deleted as superfluous, since Community law and the Treaty apply in any event. 

5) Insertion of Articles 10a, 10b and 10c 

The  fact  that  the  Directive  contains  no  Community  provisions  on  losses  and  offences 
occurring whilst excisable products already released for consumption in a Member State are 
being moved within the Community constitutes a legal loophole. The absence of provisions 
on how to determine the Member State in which excise duty is due in this case could cause 
conflict of interest between Member States and, in some cases, lead to double taxation. What 
is  more,  it  could  lead  to  different  traders  in  comparable  situations  being  treated  entirely 
differently  in  different  Member  States  and,  therefore,  to  distortion  of  competition  between 
traders. Such losses and offences should therefore be made subject to a regime similar to that 
for losses and offences detected in connection with the excise suspension arrangements (see 
Articles 14 and 20 of the Directive). 

Article  10a(1)  and  (2)  provide  for  a  tax  exemption  in  the  Member  State  of  destination  for 
losses  which  occur  whilst  excisable  products  already  released  for  consumption  in  one 
Member  State  are  moved  within  the  Community  for  commercial  purposes.  The  conditions 
subject  to  which  this  is  granted  are  laid  down  independently  by  each  Member  State,  the 
amount depending on whether the losses are attributable to fortuitous events or force majeure 
and whether they are typical of the type of product transported. Paragraph 3 covers the tax 
treatment of losses, other than those deemed to be due to an offence or irregularity, that are 
not  eligible  for  the  exemption  from  excise  duty  granted  for  the  type  of  loss  covered  in 
paragraphs 1 and 2.  

Article  10b  covers  the  tax  treatment  of  excisable  products  in  connection  with  which  an 
offence or irregularity has occurred whilst they were being moved within the Community. In 
particular, the paragraph lays down where and by whom excise duty is payable in the different 
situations  that  can  be  envisaged.  The  provisions  of  this  Article  are  similar  to  those  for 
excisable  products  moving  under  the  suspension  arrangements  (see  Article  20  of  Directive 
92/12/EEC). 

To  avoid  double  taxation,  Article  10c  provides  that  the  Member  State  of  departure  is  to 
reimburse the excise duty initially levied once evidence is provided of recovery of the excise 
duty  in  another  Member  State  in  the  cases  referred  to  in  Article  10a(3)  and  Article  10b, 
paragraphs  1  to  4.  It  also  provides  that  in  these  cases  the  guarantee  lodged  in  the  Member 
State of destination under Article 7(5)(a) and Article 10(3)(b) is to be released. 

38 

 
 
  
 
6) Amendment of Article 27 

This provides that application of the amendments made by this Directive should be evaluated 
and examined by the Council on the basis of a Commission report before 1 January 2010. 

39 

 
 
  
 
2004/0072 (CNS) 

Proposal for a 

COUNCIL DIRECTIVE 

amending Directive 92/12/EEC on the general arrangements for products subject to 
excise duty and on the holding, movement and monitoring of such products 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Article 
93 thereof, 

Having regard to the proposal from the Commission,15 

Having regard to opinion of the European Parliament,16 

Having regard to the opinion of the European Economic and Social Committee,17 

Whereas: 

(1) 

(2) 

Article  27  of  Council  Directive  92/12/EEC  of  25  February  1992  on  the  general 
arrangements  for  products  subject  to  excise  duty  and  on  the  holding,  movement  and 
monitoring of such products18 provides that before 1 January 1997 the Council is to re-
examine  the  provisions  of  Articles  7  to  10  with  a  view  to  adopting  any  necessary 
amendments. These Articles lay down the provisions applicable to movements within 
the  Community,  whether  commercial  or  private,  of  products  on  which  excise  duties 
have  already  been  paid  in  a  Member  State.  However,  at  that  date  the  volume  of 
products already released for consumption in a Member State being moved within the 
Community  was  relatively  insignificant  and  so  Member  States  had  not  yet  gathered 
sufficient  experience  to  evaluate  the  relevance  of  Articles  7  to  10  of  Directive 
92/12/EEC. 

Since then, however, although the figures for intra-Community movements of tax-paid 
products  remain  relatively  low,  more  and  more  traders  and  private  individuals  are 
trying  to  interpret  Articles  7  to  10  of  Directive  92/12/EEC  in  such  a  way  as  to 
legitimise trade practices involving payment of excise duty in the Member State where 
the products are acquired. Also, the increase in the volume of commercial transactions 
conducted  via  the  Internet  and  the  abolition  of  duty-free  sales  to  persons  travelling 
within the Community have resulted in more use being made of these provisions. On 
the  basis  of  the  conclusions  of  a  further  survey  of  the  national  administrations  and 

15 
16 
17 
18 

OJ C […] of […], p. […]. 
OJ C […] of […], p. […]. 
OJ C […] of […], p. […]. 
OJ L 76 of 23.3.1992, p.1, as last amended by Council Regulation (EC) No 807/2003 of 14 April 2003  
(OJ L 122, 16.5.2003, p. 36). 

40 

 
 
  
 
                                                 
(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

traders involved, launched in January 2002, the Commission drew up a report on the 
application of Articles 7 to 10 of Directive 92/12/EEC. 

The  report  concluded  that  some  of  these  provisions  needed  to  be  revised  and  others 
clarified  to  allow  the  taxation  and  procedural  rules  in  Articles  7  to  10  of 
Directive 92/12/EEC to be understood unequivocally. 

The  concept  of  “commercial  purposes”  should  be  defined  as  “purposes  other  than 
personal use by private individuals” to make clear that the principle of charging excise 
duties on products already released for consumption in one Member State but held for 
commercial  purposes  in  another,  as  well  as  the  associated  procedures,  apply  fully  to 
products held by private individuals for purposes other than their personal use. 

The principle of charging excise duty applies fully to excisable products held on board 
a  vessel  or  aircraft  making  crossings  or  flights  between  two  Member  States  for  sale 
during  journeys  within  the  Community  unless,  as  provided  in  Commission  notice 
1999/C 99/08,19 the products are not available for sale when the vessel or aircraft is in 
the  territory  of  one  of  those  two  Member  States.  In  that  case  the  goods  are  not 
considered to be held for commercial purposes in that Member State. To eliminate all 
doubt about the existence of this possibility, it should be explicitly provided for in the 
Directive. 

Article  7  distinguishes  different  situations  in  which  excisable  products  already 
released  for  circulation  in  one  Member  State  are  held  for  commercial  purposes  in 
another, but does not clearly identify the person from whom excise duty is due in the 
Member  State  of  destination  in  each  of  these  situations.  An  unambiguous  definition 
should  therefore  be  given  of  the  person  from  whom  excise  duty  is  due  and  the 
requirements  to  be  met  in  the  Member  State  of  destination  in  each  of  the  situations 
referred to. 

In  these  situations  the  obligations  of  persons  not  established  in  the  Member  State  of 
holding but liable for excise duty should be simplified and at the same time provision 
should  be  made  for  the  Member  States  concerned  to  supervise  the  movements  more 
effectively. 

The  concept  of  “trader  carrying  out  an  economic  activity  independently”  should  be 
replaced by the concept of “trader”, since all categories of trader are concerned. 

In  view  of  the  difficulties  encountered  by  Member  States  wishing  to  introduce 
simplified procedures by means of bilateral conventions on the basis of Article 7(9), in 
particular  in  the  case  of  sales  on  board  an  aircraft  or  vessel  during  travel  within  the 
Community, the use of simple administrative agreements to introduce such simplified 
procedures should be allowed. 

(10)  Article  8  sets  out  the  principle  governing  the  single  market  whereby  in  the  case  of 
products  acquired  by  private  individuals  for  their  own  use  and  transported  by  them, 
excise is to be charged in the Member State in which the products are acquired. This 
principle  should  be  extended  to  apply  to  products  for  the  personal  use  of  a  private 

19 

Commission notice concerning the VAT and excise rules to be applied from 1 July 1999 by suppliers of 
goods  sold  on  board  ferries  and  aircraft  or  in  airports  to  passengers  travelling  within  the  European 
Union - 1999/C 99/08(OJ C 99, 10.4.1999, p.20). 

41 

 
 
  
 
                                                 
individual transported by a third party on behalf of the private individual, since such 
transactions are purely private. For health protection reasons this principle should not 
however be extended to cover manufactured tobacco transported on behalf of a private 
individual. 

(11) 

It should be specified that the principle set out in Article 8 also applies to products sent 
by  one  private  individual  to  another  without  any  payment,  direct  or  indirect  (this 
applies  mainly  to  gifts),  to  clear  up  any  doubts  as  to  how  such  non-commercial 
movements are to be treated. 

(12)  Article  9(1)  should  be  deleted,  since  it  simply  repeats  the  chargeable  event  already 
provided for in Article 7(1), with the sole difference that the excise debtor is the holder 
of  the  products  instead  of  the  debtors  identified  in  the  situations  referred  to  in 
Article 7.  To  cover  the  situations  currently  referred  to  in  Article  9,  a  subparagraph 
should be added to Article 7(3) stipulating that in cases other than those for which the 
person from whom excise duty is due is explicitly designated, that person shall be the 
holder of the products. 

(13)  The provision allowing Member States to lay down guide levels to establish whether 
products  are  held  for  commercial  purposes  or  for  the  personal  use  of  private 
individuals should be deleted. In any case an administration can never use these guide 
levels on their own as evidence that excisable products are being held for commercial 
purposes. They should therefore only be included in inspection instructions given by a 
national administration to its officers. 

(14)  Article  9(3)  should  be  deleted  since  it  is  not  appropriate  to  retain  a  tax  provision 
allowing  Member  States  to  derogate  from  the  principle  laid  down  in  Article  8  in 
respect of the transport of mineral oils for safety reasons. 

(15) 

It should be specified that the situation covered by Article 10 (“distance sales”) refers 
only  to  movements  to  persons  acting  in  their  capacity  as  private  individuals,  since 
movements  to  traders  or  bodies  governed  by  public  law  are  explicitly  covered  by 
Article  7.  For  these  “distance  sales”  a  procedure  should  also  be  introduced  for  the 
payment  of  excise  in  the  Member  State  of  destination  that  reconciles  traders’ 
legitimate  calls  for  simplification  with  the  need  to  increase  the  possibilities  of 
monitoring this type of transaction. 

(16)  The  fact  that  the  Directive  contains  no  common  provisions  on  losses  and  offences 
occurring  whilst  excisable  products  already  released  for  consumption  in  a  Member 
State are being moved within the Community constitutes a legal loophole which may 
lead to conflicts of interest between Member States and in some cases lead to double 
taxation.  Such  losses  and  offences  should  therefore  be  made  subject  to  a  regime 
similar  to  that  for  losses  and  offences  detected  in  connection  with  the  excise 
suspension arrangements. 

(17)  The  application  of  amendments  made  by  this  Directive  should  be  evaluated  and 

examined by the Council on the basis of a Commission report before 1 January 2010. 

(18)  Directive 92/12/EEC should be amended accordingly, 

42 

 
 
  
 
HAS ADOPTED THIS DIRECTIVE: 

Article 1 

Directive 92/12/EEC is amended as follows: 

1) Article 7 is amended as follows: 

a) paragraph 1 is replaced by the following: 

"1.  Where  products  subject  to  excise  duty  and  already  released  for  consumption  in  one 
Member  State  are  held  for  commercial  purposes  in  another  Member  State,  the  excise  duty 
shall be levied in that other Member State. 

“Commercial purposes” shall be deemed to be all purposes other than personal use by private 
individuals. 

However,  products  which  are  held  on  board  a  vessel  or  aircraft  making  crossings  or  flights 
between two Member States but which are not available for sale when the vessel or aircraft is 
in  the  territory  of  one  of  the  Member  States  are  not  deemed  to  be  held  for  commercial 
purposes in that Member State.” 

b) paragraph 2 is deleted; 

c) paragraphs 3 and 9 are replaced by the following: 

In  the  situations  referred  to  in  paragraph  1,  where  products  are  held  by  a  trader  not 
"3. 
established in the Member State of holding (hereinafter “non-established trader”) with a view 
to their sale, the excise duty shall be due from that trader.  

Where  the  products  used  within another  Member  State  for  the purposes  of  a  trader  or  body 
subject to public law, the excise duty shall be due from the trader or body subject to public 
law. 

However, where the products are delivered to a non-established trader, that trader may pay the 
excise duty instead of the debtors identified in the second subparagraph. 

In all other cases the excise duty is due from the person holding the products for commercial 
purposes. 

4. 
The products referred to in paragraph 1, excluding those in respect of which the non-
established trader is identified as the excise debtor, shall move between the territories of the 
various Member States under cover of an accompanying document listing the main data from 
the document referred to in Article 18 (1). 

The form and content of this document shall be established in accordance with the procedure 
laid down in Article 24(3) and (4). 

5. 

Non-established traders shall comply with the requirements set out in Article 10(3). 

43 

 
 
  
 
The  traders  and  bodies  governed  by  public  law  referred  to  in  the  second  subparagraph  of 
paragraph 3, and the persons from whom excise duty is due under the fourth subparagraph of 
paragraph 3 must: 

a) 

b) 

c) 

before  the  goods  are  dispatched,  submit  a  declaration  to  the  tax  authorities  of  the 
Member State of destination and guarantee payment of the excise duty; 

pay  the  excise  duty  of  the  Member  State  of  destination  in  accordance  with  the 
procedure laid down by that Member State; 

consent to any checks enabling the administration of the Member State of destination 
to satisfy itself that the products have actually been received and that the excise duty 
chargeable on them has been paid. 

The  excise  duty  paid  in  the  first  Member  State  referred  to  in  paragraph  1  shall  be 

6. 
reimbursed in accordance with Article 22(3). 

7. 
Where products already released for consumption in a Member State are to be moved 
to a place of destination in that Member State via the territory of another Member State and 
using  an  appropriate  itinerary,  such  movement  shall  take  place  under  cover  of  the 
accompanying document referred to in paragraph 4. 

8. 

a) 

b) 

c) 

In the cases referred to in paragraph 7, the following requirements shall apply: 

the  consignor  shall,  before  the  goods  are  dispatched,  make  a  declaration  to  the  tax 
authorities of the place of departure responsible for carrying out excise-duty checks; 

the consignee shall attest to having received the goods in accordance with the rules 
laid  down  by  the  tax  authorities  responsible  for  carrying  out  excise-duty  checks  in 
the place of destination; 

the consignor and the consignee shall consent to any checks enabling their respective 
tax authorities to satisfy themselves that the goods have actually been received. 

9. 
Where products  subject to excise duty are  moved frequently and  regularly under the 
conditions specified in paragraph 7, Member States may, by means of bilateral administrative 
agreements, authorise a simplified procedure in derogation from paragraphs 7 and 8.” 

2) Article 8 is replaced by the following: 

"Article 8 

Excise duty on products acquired by private individuals for personal use and transported from 
one  Member  State  to  another  by  them  shall  be  charged  in  the  Member  State  in  which  the 
products are acquired. 

As  regards  products  other  than  manufactured  tobaccos  acquired  by  private  individuals,  the 
provisions  of  the  first  subparagraph  shall  also  apply  in  cases  where  the  products  are 
transported on their behalf. 

Taxation  in  the  Member  State  of  acquisition  also  applies  to  products  dispatched  by  one 
private individual to another without any payment, direct or indirect. 

44 

 
 
  
 
3) Article 9 is amended as follows: 

a) paragraph 1 is deleted; 

b) paragraph 2 is replaced by the following: 

To determine whether the products referred to in Article 8 are intended for commercial 

"2. 
purposes, Member States shall take account of the following: 

a) 

b) 

c) 

d) 

e) 

the commercial status of the holder of the products and his reasons for holding them; 

the place where the products are located or, if appropriate, the mode of transport used; 

any document relating to the products; 

the nature of the products; 

the quantity of the products.” 

c) Paragraph 3 is deleted. 

4) Article 10 is replaced by the following: 

"Article 10 

1. 
Products already released for consumption which are purchased by persons acting in 
their  capacity  as  private  individuals  and  which  are  dispatched  or  transported  directly  or 
indirectly  by  the  vendor  or  on  his  behalf  are  subject  to  excise  duty  in  the  Member  State  of 
destination. 

'Member State of destination' shall mean the Member State of arrival of the consignment or of 
transport. 

In the case referred to in paragraph 1, the excise duty becomes chargeable at the time 

2. 
of delivery of the products.  

3. 

The excise duty in the Member State of destination is chargeable to the vendor. 

The vendor must: 

a) 

b) 

c) 

d) 

register  his  identity  with  the  tax  authorities  of  his  Member  State,  as  certified  by  a 
document  whose  form  and  content  shall  be  laid  down  in  accordance  with  the 
procedure set out in Article 24 (3) and (4); 

before  dispatching  the  products,  lodge  a  guarantee  covering  payment  of  the  excise 
duty with the “central” tax office designated by the Member State of destination; 

for  control  purposes,  indicate  the  identification  number  referred  to  in  the  third 
subparagraph  on  the  commercial  documents  accompanying  the  consignments  of 
excisable products; 

at the end of a given period, to be determined by each Member State, send the central 
office  with  which  his  identity  is  registered  a  document  setting  out  the  quantities  of 
products he delivered during that period. 

45 

 
 
  
 
The  Member  State  of  destination  shall  define  the  conditions  for  calculating  the  guarantee 
referred to in point b) of the first subparagraph. When lodging the guarantee, the vendor shall 
produce the identifying document referred to in paragraph (a) of the first subparagraph. The 
Member State of destination shall then allocate the vendor an identification number. 

The form and content of the document referred to in point d) of the first subparagraph shall be 
established  in  accordance  with  the  procedure  laid  down  in  Article  24(3)  and  (4).  The 
document  shall  be  endorsed  by  the  tax  authorities  of  the  Member  State  of  departure  and, 
where  appropriate,  shall  be  accompanied  by  the  administrative  and  commercial  documents 
required by the Member State of destination. The excise duty shall be paid in accordance with 
the procedure laid down by the Member State of destination. 

In the case referred to in paragraph 1, the excise duty paid in the first Member State 

4. 
shall be reimbursed in accordance with Article 22 (4). 

Member States may lay down specific rules for applying paragraphs 1 to 4 to products 

5. 
subject to excise duty that are covered by special national distribution arrangements.” 

5) 

The following Articles 10a, 10b and 10c are inserted: 

"Article 10a 

1. 
Persons  from  whom  excise  duty  is  due  under  Article  7(3)  or  Article  10(3)  shall  be 
exempt  from  duty  in  the  Member  State  of  destination  in  respect  of  losses  attributable  to 
fortuitous events or force majeure that occur in the course of movements of products and are 
established by the authorities of the each Member State. 

They shall also be exempt from duty in the Member State of destination in respect of losses 
inherent in the nature of the products during transport. Each Member State shall lay down the 
conditions under which these exemptions are granted. 

The losses referred to in paragraph 1 shall be established according to the applicable 

2. 
rules of the Member State of destination. 

The  guarantee  lodged  pursuant  to  Article  7(5)(a)  and  Article  10(3)(b)  shall  be  totally  or 
partially released. 

3. 
Without  prejudice  to  Article  10b(1),  the  duty  on  shortages  other  than  the  losses 
referred to in paragraph 1 of this Article shall be levied on the basis of the rates applicable in 
the  Member  States  concerned  at  the  time  the  losses,  duly  established  by  the  competent 
authorities, occurred, or if necessary at the time the shortage was recorded. 

Article 10b 

1. 
Where  an  irregularity  or  offence  on  which  excise  duty  is  chargeable  has  been 
committed in the course of a movement which comes under Article 7(4) or Article 10(1), the 
duty shall be due in the Member State where the offence or irregularity was committed from 
the person who guaranteed payment of the duty in accordance with Article 7(5)(a) or Article 
10(3)(b). 

Where the excise duty is collected in a Member State other than that of departure, the Member 
State  collecting  the  duty  shall  inform  the  competent  authorities  of  the  Member  State  of 
departure. 

46 

 
 
  
 
2. 
When, in the course of a movement of products carried out in accordance with Article 
7(4) or Article 10(1), an offence or irregularity has been detected without it being possible to 
determine where it was committed, the offence or irregularity shall be deemed to have been 
committed in the Member State where it was detected. 

3. 
When the products do not arrive at their destination and it is not possible to determine 
where the offence or irregularity was committed, it shall be deemed to have been committed 
in the Member State of departure. 

4. 
If,  before  the  expiry  of  a  period  of  three  years  from  the  date  on  which  the 
accompanying document referred to in Article 7(4) or the commercial document referred to in 
Article  10(3)(c)  was  drawn  up,  the  Member  State  where  the  offence  or  irregularity  was 
committed is ascertained, that Member State shall collect the excise duty at the rate in force 
on the date when the goods were dispatched. 

Member  States  shall  take  the  necessary  measures  to  deal  with  any  offence  or 

5. 
irregularity and to impose effective penalties. 

Article 10c 

In the cases referred to in Article 10a(3) and Article 10b(1) to (4), once evidence is provided 
of recovery of the excise duty in a Member State other than that of departure, the excise duty 
initially levied shall be reimbursed and the guarantee lodged pursuant to Article 7(5)(a) and 
Article 10(3)(b) shall be released. 

6) 

Article 27 is replaced by the following: 

“On the basis of a report from the Commission, the Council shall re-examine the provisions of 
Articles 7 to 10c before 1 January 2010 and in accordance with Article 93 of the Treaty shall 
adopt any necessary amendments.” 

Article 2 

1. 
Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative 
provisions necessary to comply with this Directive by […] at the latest. They shall send the 
Commission  forthwith  the  text  of  those  provisions  and  a  correlation  table  between  those 
provisions and this Directive. 

When Member States adopt these provisions, these shall contain a reference to this Directive 
or  shall  be  accompanied  by  such  reference  at  the  time  of  their  official  publication.  The 
methods of making such a reference shall be decided by the Member State. 

Member States shall communicate to the Commission the text of the main provisions 

2. 
of domestic law which they adopt in the field governed by this Directive. 

This Directive shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

Article 3 

47 

 
 
  
 
Article 4 

This Directive is addressed to the Member States. 

Done at Brussels, […] 

For the Council 
The President 

48