Opinion of the European Economic and Social Committee on the ‘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’(COM(2004) 227 final)
Date: 2004-10-27
Institutions: European Economic and Social Committee
Subjects: ESC opinion, administrative formalities, consumer information, customs regulations, distance selling, excise duty, quantitative restriction, transport policy

20.5.2005

EN

Official Journal of the European Union

C 120/111

Opinion of the European Economic and Social Committee on the ‘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’

(COM(2004) 227 final)

(2005/C 120/19)

On 24 May 2004, the Council decided to consult the European Economic and Social Committee, under
Article 262 of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for Economic and Monetary Union and Economic and Social Cohesion, which was responsible
for preparing the Committee's work on the subject, adopted its opinion on 7 October 2004. The rappor-
teur was Mr Wilkinson.

At its 412th plenary session (meeting of 27 October 2004), the European Economic and Social Committee
adopted the following opinion by 84 votes in favour and 11 votes against, with 5 abstentions.

1. Introduction

Before the Internal Market came into operation there
1.1
were wide differences in the systems and rates applied to exci-
sable goods resulting from historical and cultural differences
between Member States. Directive 92/12/EEC agreed to harmo-
nise the general arrangements for products subject to excise
duty (1) and on the holding, movement and monitoring of such
products (2).

Article 27 of

this Directive required that before 1
1.2
January 1997 the Council should re-examine the provision of
Articles 7, 8, 9 and 10 and adopt any necessary amend-
ments (3). This deadline of 1 January 1997 proved to be too
early to give a valid verdict on the difficulties that had been
experienced, and continue to be experienced, in applying these
Articles.

to the introduction by some Member States of some simplified
procedures. Also there have been many complaints from the
public in the way in which the Articles concerned have been
applied.

The Commission considers that there is now enough
1.4
understanding of the problems that exist in the various cate-
gories of movement that are involved (4) to propose necessary
amendments.

2. General comments

The operation of

the single market with respect

to
2.1
goods subject to excise duty has been complicated in its details,
with a consequent uncertainty on how the regulations should
be applied in some cases, and has imposed significant adminis-
trative burdens on the businesses involved. The Commission
proposals cover commercial transactions, sales to private indivi-
duals and distance sales and aim to clarify, simplify and harmo-
nise existing rules on intra-EU movements on which excise tax
has already been paid in a Member State for the products
concerned and to liberalise such movements so that EU consu-
mers can enjoy more benefits from the Internal Market. The
Committee welcomes both these objectives.

Since the directive ca me into force the interest

1.3
in
moving those excisable products on which tax had already
been paid, which are regulated by Articles 7 to 10 of the Direc-
tive, has grown considerably. This led, at the request of traders,

(1) The goods are manufactured tobacco, mineral oils and alcoholic

beverages.

(2) Generally excisable products moving within the EU do so under
‘duty suspension’ between ‘tax warehouses’
in the Member States
under cover of agreed documentation. Excise duty is paid in the
Member States where the products are in due course released for
consumption.

(3) Excisable goods already released for consumption in a Member
State, and thus on which excise duty has been paid in that Member
State, may also be moved within the EU. It is movements of this
type that are regulated by the provisions of Articles 7 to 10.

2.2
Because of the value of Member States' revenues from
excise duties (5), and because of the differences in the ways in
which Member States enforce the regulations, it has been diffi-
cult for the Commission to agree amendments with Member

(4) The categories are products moved between Member States for
commercial purposes (other than ‘distance sales’), which are defined
as all purposes other than personal use by private individuals,
products purchased directly by private individuals for their own use,
and distance sales.

(5) The total value to Member States EU GDP in 2001 (15 MS) was in
excess of EUR 8,8 billion and the average EU excise revenues as a
percentage of GDP was 2,72 %.

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Official Journal of the European Union

20.5.2005

States. It is noted that the 10 ‘new’ Member States were not
involved in the discussions with the Commission that led to the
proposals. The Committee recognises the need for Member
States to use excise duties as part of their revenues raising, but
doubts that these proposals will change consumer habits to the
extent that they will affect overall revenues substantially.

2.8
The Committee greatly welcomes the fact that many of
the proposals are based on advice and requests from the busi-
ness organisations involved in these matters and that they take
cognisance of the effects on smaller enterprises.

2.3
For goods subject to excise duty, consumer prices are
often affected greatly by the tax rates applied. This is particu-
larly true for manufactured tobacco products and for alcoholic
beverages (1). There has been some reduction in the differences
between excise duty rates applied in Member States since the
start of the single market; but until the rates applied are subject
to at least a significant measure of harmonisation the motive to
seek better bargains in this area will persist and organised crim-
inal activities will also continue in the area.

2.4
EU citizens expect to benefit from the single market in
all sorts of ways, but the right to purchase any products wher-
ever they wish in the EU at the local prices is an important
benefit. To deny citizens this right does not encourage them to
see the EU in a positive light.

2.5
As the Commission points out, the type of duty paid
movement covered by the Articles in question mainly involved
private individuals or small traders, who do not have substan-
tial
is
important that all measures agreed should be clear, simple to
understand and, so far as possible, simple to apply. They must
also be realistic and enforceable.

resources or commercial

infrastructure.

financial

It

3. Specific comments

3.1
Article 7. This essentially covers who should pay excise
duties under various circumstances, administrative formalities,
sales to passengers on intra EU journeys by ship or aircraft and
the way in which losses of duty paid goods occurring on intra
EU journeys should be handled.

the

clarifications

The Committee welcomes

3.1.1
and
harmonisation that the Commission's proposals will bring. It
also greatly welcomes the recognition that the massive amount
of administrative work required to comply fully under the
existing rules needs to be reduced. The Committee supports the
Commission's call
for Member States to permit simplified
procedures to be introduced by simple bilateral administrative
agreements between Member States.

3.2
Article 8. This Article concerns products acquired by a
private individual for their own use. The major point of issue
here is the need for the goods concerned to be carried person-
ally by the individual concerned.

2.6
In a true internal market the rules on tobacco products
should also be liberalised. However, the Committee recognises
that in deciding what goods to include in the amended directive
Member States will have to consider all the implications fully
and that this might lead them to exclude some products.

3.2.1
The Committee welcomes the Commission's proposal
to liberalise the system currently applied to distance purchases
by private individuals so that the individual would no longer
need to transport the goods purchased personally.

2.7
It also notes that mineral oils are seldom moved other
than commercially. It is thus clear that the proposals as formu-
lated would mainly affect movements of alcoholic drinks.

(1) For manufactured tobacco products shop prices are about 3,7 times
greater in the highest taxed Member State than in the lowest taxed.
Excise duty rates applied to alcoholic beverages vary between
highest and lowest taxing Member State by 15,9 times for beer and
‘intermediate products’ and by 9,2 times for spirit drinks. No such
comparison can be given for wine products, since wine is not taxed
at all in 12 of the 25 Member States and a minimal tax of 2 euro-
cents per bottle is applied in 2 further Member States.

3.2.2
The Committee understands that the new proposal
that the individual would personally have to make arrange-
ments for the goods to be delivered to another Member State
(and that these arrangements could not be made by the vendor)
accords with the current general rules on VAT applied to
distance purchases. However, it is hard to see how it could be
enforced. For example, presumably the vendors could recom-
mend a local agent who would arrange the transport, thus
meeting the legal need not to make the arrangements them-
selves; but the effect would be the same. It should be made
clear that
this sort of advice under the amended directive
would not be against the rules.

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C 120/113

The proposal

to abolish the ‘indicative limits’ (1) as
3.3
possible evidence on whether goods are for private or commer-
cial use is welcomed by the Committee. The public generally
take these figures as quantitative limits and too often the limits
have been interpreted very narrowly in some Member States.
The Committee recognises that removing these limits may
make it harder to combat smuggling activities, but the limits
have never been intended as more than one indication of
whether a movement was for commercial rather than personal
use; nor are they of themselves sufficient evidence legally.

3.4
Article 9. The proposals covering the movement for
personal use of mineral oils are most unlikely to cause signifi-
cant problems.

Article 10. The Committee welcomes the proposed clar-

3.5
ification of where excise duty is payable.

4. Summary

The Committee welcomes the proposals made by the

4.1
Commission in this complex and sensitive area.

3.3.1
However, the Committee suggests that it would not be
inappropriate to apply some sort of quantitative restrictions to
distance purchases (i.e. when the goods are not transported by
the individuals concerned themselves).

4.2
The proposals are realistic; the clarifications and simpli-
fications are most welcome, the harmonisation is necessary and
the liberalisation will be warmly welcomed by EU citizens since
the benefits of the single market will be reinforced.

Brussels, 27 October 2004.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

(1) Indicative limits are now 800 cigarettes, 10 litres of spirits, 90 litres

of wine and 110 litres of beer.