Proposal for a COUNCIL DIRECTIVE amending Directive (EU) 2020/262 as regards the general arrangements for excise duty in respect of tobacco and tobacco related products
Date: 2025-07-16
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: excise duty, smoking, tax harmonisation, tobacco, tobacco industry

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 16.7.2025  COM(2025) 581 final 2025/0581 (CNS)  Proposal for a COUNCIL DIRECTIVE amending Directive (EU) 2020/262 as regards the general arrangements for excise duty in respect of tobacco and tobacco related products  
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

• 
Council Directive (EU) 2020/2621 (hereinafter ‘the Directive’) sets out general arrangements 
for  goods  subject  to  excise  duty,  with  particular  emphasis  on  the  production,  storage  and 
movement  of  excise  goods  between  Member  States.  The  Directive  has  replaced  Council 
Directive  2008/118/EC2.  The  main  objective  of  the  Directive  is  to  allow  goods  to  circulate 
freely within the EU while also ensuring that the correct tax debt is collected by the Member 
States. 

This  technical  amendment  to  the  Directive  stems  from  the  revision  of  Council  Directive 
2011/64/EU on the structure and rates of excise duty applied to manufactured tobacco3. The 
context of this initiative is set out comprehensively in the explanatory memorandum for the 
proposal for a Council Directive on the structure and rates of excise duty applied to tobacco 
and tobacco related products4. The draft proposal would revise Council Directive 2011/64/EU 
by better aligning the taxation of tobacco and tobacco related products with health objectives 
and  adapt  to  new  developments  and  market  trends,  by  introducing  harmonised  excise  duty 
taxation  rules  for  new  products  (such  as  heated  tobacco  products,  liquids  for  electronic 
cigarettes and other nicotine containing products) and raw tobacco. 

The  proposal  to  amend  the  Directive  is  required  to  bring  legal  certainty  and  ensure  that 
general arrangements for excise duty will also be applicable to the newly defined tobacco and 
tobacco related products and to raw tobacco.  

• 

Consistency with existing policy provisions in the policy area 

The  proposal  carries  forward  the  objectives  of  the  Directive,  namely,  to  ensure  the  smooth 
functioning of the internal market and to ensure effective taxation.  

• 

Consistency with other Union policies 

The  revision  of  the  Directive  is  consistent  with  the  proposed  revision  of  Council  Directive 
2011/64/EU  which  has  the  same  objectives  as  that  Directive,  namely,  to  ensure  the  proper 
functioning of the internal market and an efficient excise administration. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The proposal is based on Article 113 of the Treaty on the Functioning of the European Union 
(TFEU)5.  This  article  provides  for  the  Council,  acting  unanimously  in  accordance  with  a 
special legislative procedure and after consulting the European Parliament and the Economic 

1 

2 

3 

4 
5 

Council  Directive  (EU)  2020/262  of  19  December  2019  laying  down  the  general  arrangements  for 
excise duty (recast) OJ L 58, 27.2.2020, p. 4–42. 
Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for  excise 
duty and repealing Directive 92/12/EEC, OJ L 9, 14.1.2009, p.12-30. 
Council  Directive  2011/64/EU  on  the  structure  and  rates  of  excise  duty  applied  to  manufactured 
tobacco, OJ L 176, 5.7.2011, p. 24–36. 
Please include reference when available. 
Consolidated version of the Treaty on the Functioning of the European Union, OJ C 326, 26.10.2012, p. 
47–390. 

EN 

1 

  EN 

 
and Social Committee, to adopt provisions for the harmonisation of Member States' rules in 
the area of indirect taxation. 

• 

Subsidiarity (for non-exclusive competence)  

In  accordance  with  the  principles  of  subsidiarity  and  proportionality  as  set  out  in  Article  5 
TFEU, the objectives of the proposal cannot be sufficiently achieved by Member States alone 
and can therefore be better achieved at Union level.  

• 

Proportionality 

This proposal complies with the principle of proportionality as set out in Article 5(4) TFEU. 
The proposed amendments do not go beyond what is necessary to address the issues at stake 
and to ensure that the internal market functions properly and effectively. 

• 

Choice of the instrument 

The proposal is a Directive. 

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

Changes  to  the  Directive  are  required  following  the  changes  proposed  in  the  revision  of 
Council Directive 2011/64/EU, including the extension of the scope of that Directive to cover 
new products and raw tobacco. The proposed revision of Council Directive 2011/64/EU has 
already  undergone  an  evaluation  process,  which  is  extensively  presented  in  the  explanatory 
memorandum of the proposal to amend Council Directive 2011/64/EU.  

• 

Stakeholder consultations 

information  on  stakeholder  consultations 

Extensive 
the  explanatory 
memorandum of the proposal for a Council Directive on the structure and rates of excise duty 
applied to tobacco and tobacco related products. 

is  provided 

in 

The  consultation  strategy  for  the  revision  of  the  Council  Directive  2011/64/EU  sought  to 
gather feedback from stakeholders on the application of the current rules on the structures of 
excise  duty  applied  to  manufactured  tobacco  products,  on  the  need  to  upgrade  the  EU 
regulatory framework and to get their views on possible changes. 

• 

Collection and use of expertise 

The  collection  and  use  of  expertise  is  set  out  comprehensively  in  the  explanatory 
memorandum of the proposal for a Council Directive on the structure and rates of excise duty 
applied to tobacco and tobacco related products.  

• 

Impact assessment 

The  impact  assessment  is  provided  in  the  explanatory  memorandum  of  the  proposal  for  a 
Council  Directive  on  the  structure  and  rates  of  excise  duty  applied  to  tobacco  and  tobacco 
related products. 

• 

Regulatory fitness and simplification 

Extensive information on Regulatory fitness and simplification is provided in the explanatory 
memorandum of the proposal for a Council Directive on the structure and rates of excise duty 
applied to tobacco and tobacco related products. 

EN 

2 

  EN 

 • 

Fundamental rights 

The measure has no bearing on fundamental rights. 

4. 

BUDGETARY IMPLICATIONS 

Excise duty is revenue to the national budget of Member States. The Own Resources Decision 
presented  in  parallel  to  this  proposal,  foresees  a  new  own  resource  calling  a  share  of  the 
minimum  rate  for  tobacco  and  tobacco  related  products.  While  not  legally  linked  to  the 
proposed  Directive  revision,  it  builds  on  the  policy  choices  as  set  in  the  Directive  (and  its 
revisions).  It  reinforces  the  commitment  towards  safeguarding  and  improving  the  overall 
health of citizens, as well as mitigating distortions caused by cross-border trading of products 
in the scope of the Directive. 

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

An implementation plan is not necessary as this proposal is a technical amendment. 

EN 

3 

  EN 

2025/0581 (CNS) 

Proposal for a 

COUNCIL DIRECTIVE 

amending Directive (EU) 2020/262 as regards the general arrangements for excise duty 
in respect of tobacco and tobacco related products 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 113 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 
Having regard to the opinion of the European Parliament1, 
Having regard to the opinion of the European Economic and Social Committee2, 

Acting in accordance with a special legislative procedure, 

Whereas: 

(1) 

Council  Directive  (EU)  2020/2623  lays  down  general  arrangements  for  excise  duty 
levied  on  the  consumption  of  certain  excise  goods,  including  manufactured  tobacco 
covered by Council Directive 2011/64/EU4. Directive 2011/64/EU, which established 
the structure and rates of excise duty of manufactured tobacco, has been replaced by 
Council Directive (EU) XX/XXX [OP please insert number and year of the Council 
Directive  on  the  structure  and  rates  of  excise  duty  applied  to  tobacco  and  tobacco 
related products adopted the same day as this Directive]5  with effect from 1 January 
2028.  Directive  (EU)  XX/XXX  [OP  please  insert  number  and  year  of  the  Council 
Directive  on  the  structure  and  rates  of  excise  duty  applied  to  tobacco  and  tobacco 
related  products  adopted  the  same  day  as  this  Directive]  covers  a  number  of  new 
products  functioning  as  substitutes  for  manufactured  tobacco,  containing  tobacco  or 
nicotine, and raw tobacco. Consequently, the list of excise goods to  which Directive 
(EU) 2020/262 applies should also cover all those products. 

(2) 

To  ensure  the  detection  of  irregularities  and  potential  diversions,  supply-chain 
operations  for  raw  tobacco  should  be  subject  to  the  control  and  movement 
requirements  of  Council  Directive  (EU)  2020/262.  Given  the  burden  it  would 
represent  for  small  growers  and  the  limited  risk  of  fraud,  Member  States  should 

1 
2 
3 

4 

5 

OJ C , , p. . 
OJ C , , p. . 
Council  Directive  (EU)  2020/262  of  19  December  2019  laying  down  the  general  arrangements  for 
excise duty (OJ L 58, 27.2.2020, p. 4, ELI: http://data.europa.eu/eli/dir/2020/262/oj). 
Council  Directive  2011/64/EU  of  21  June  2011  on  the  structure  and  rates  of  excise  duty  applied  to 
manufactured tobacco (OJ L 176, 5.7.2011, p. 24, ELI: http://data.europa.eu/eli/dir/2011/64/oj). 
Council  Directive  XX/XXX  [OP  please  insert  number  and  year  and  OJ  reference  of  the  Council 
Directive  on  the  structure  and  rates  of  excise  duty  applied  to  tobacco  and  tobacco  related  products 
adopted the same day as this Directive]. 

EN 

4 

  EN 

 
exempt  tobacco  growers,  their  organisations  and  associations  from  the  control  and 
movement requirements, provided they are not involved in the transformation of cured 
or dried tobacco into processed tobacco. 

(3) 

Directive (EU) 2020/262 should therefore be amended accordingly, 

HAS ADOPTED THIS DIRECTIVE: 

Article 1 

Directive (EU) 2020/262 is amended as follows:  

in Article 1(1) of Directive (EU) 2020/262, point (c) is replaced by the following 

‘(c) tobacco and tobacco related products covered by Council Directive (EU) XX/XXX*’; 

the following Article is inserted: 

‘Article 50a 
 Tobacco growers, their organisations and associations 

Member States shall exclude tobacco growers, their organisations and associations from  the 
requirements of Articles 14 to 21, 24 to 28, 30 to 31, 33 to 47 and from the other requirements 
relating to excise duty chargeability, provided that they are not involved in the transformation 
of cured or dried tobacco into processed tobacco.’ 

___________ 

* Council Directive XX/XXX [OP please insert number and year, OJ reference and ELI of the Council Directive 
on the structure and rates of excise duty applied to tobacco and tobacco related products adopted the same day as 
this Directive].’. 

Article 2 

Member States shall adopt and publish, by 31 December 2027 at the latest, the laws, 
1. 
regulations and administrative provisions necessary to comply with this Directive. They shall 
forthwith communicate to the Commission the text of those provisions. 

They shall apply those provisions from 1 January 2028. 

When Member States adopt those provisions, they shall contain a reference to this Directive 
or be accompanied by such a reference on the occasion of their official publication. Member 
States shall determine how such reference is to be made. 

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

2. 
of national law which they adopt in the field covered 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 

EN 

5 

  EN 

 
 
This Directive is addressed to the Member States. 

Done at Brussels, 

Article 4 

For the Council 
The President 

EN 

6 

  EN