CELEX: 51990PC0432
Language: en
Date: 1990-11-07
Title: PROPOSAL FOR A COUNCIL DIRECTIVE ON THE HARMONIZATION OF THE STRUCTURES OF EXCISE DUTIES ON ALCOHOLIC BEVERAGES AND ON THE ALCOHOL CONTAINED IN OTHER PRODUCTS

COMMISSION OF THE EUROPEAN COMMUNITIES
                                             COM(90) 432 final
                                             Brussels,7 November 1990
                                Proposal for a
                              COUNCIL PIRECTIVE
           on the harmonization of the structures of excise duties
                  on alcoholic beverages and on the alcohol
                         contained in other products
                       (presented by the Commission)
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 ---pagebreak--- EXPLANATORY MEMORANDUM
I.     INTRODUCTION
       1. In the      context of       its programme      for the
          achievement of the internal market and in
          particular the requirements of Article 99 of the
          EC Treaty, the Commission put forward in 1987 a
          proposal for common rates of excise duty on
          alcoholic drinks and the alcohol contained in
          other products(1). In the light of subsequent
          reactions, amendments to that proposal were put
          forward in 1989 (2) with the intention of easing
          the process of adjustment for the Member States.
          As a measure of flexibility, the Commission
          proposed, on the one hand, that national excise
          rates should be brought into conformity with
          prescribed minimum rates by 31 December 1992 and,
          on the other hand, that Member States with
          national rates in excess of the long term target
          rates (which the proposal also put forward) might
          decrease, but not increase their national rates.
          Similarly, national rates inferior to the target
          rates may only be moved towards those rates. Those
          requirements represent a first step in a gradual
          alignment on the long term target rates, while at
          the same time constituting the approximation which
          is indispensable to the abolition of fiscal
          frontiers by the 31 December 1992 deadline laid
          down by the Single European Act.
       2. However,      to    ensure    the     establishment   and
          functioning of the internal market, it is not
          sufficient that the rates of indirect taxation
          applied in the Community be approximated. The
          framework within which these taxes are charged
          must also be identified, and a common structure
          laid     down    in those      areas where      continued
 (1) COMC87) 328 final, OJ C 250 18.9.1987.
 C2) COM (B9)'527 FINAL, oJ C 12 18.1.1990, P. 12.
 ---pagebreak---                                                             3
        differences in national practices would hinder or
        distort the free movement of goods after the
        abolition of fiscal frontiers.
        This does not entail the establishment of a
        completely uniform fiscal system, but it does
        require a sufficient degree of coordination to
        ensure that a Europe without frontiers does not
        result in unacceptable distortions of competition.
        The necessary provisions must, inter alia, ensure
        that as a general principle goods which are traded
        across frontiers are not exempt in one Member
        State but taxable in another, and that taxable
        goods fall within the same tax category throughout
        the Community. The proposed Directive therefore
        seeks to ensure that the scope and nature of each
        duty - and the exemptions from it - are clearly
        identified at the Community level.
II. BACKGROUND
     1. The present proposal has its origins in three
        proposals which date from 1972 (COM(72)0225 2/4
        final) and one proposal which dates from 1985
         (COM(85)151 final), all      four of which the
        Commission intends to withdraw.
        The present proposal differs from the originals in
        the following respects:
        - all provisions concerning the warehousing and
           circulation of goods have been withdrawn and
           dealt with in a directive covering this field on
           an across-the-board basis for all goods subject
           to excise duty;
        - certain provisions which it is considered need
           not be harmonized for the purposes of the single
           market have been removed, and certain provisions
           which were considered too vague to fulfil their
           necessary function have been clarified;
 ---pagebreak---                                                      4
-all provisions have been reviewed and updated in
  the light of the Commission's proposal to
  approximate the rates of duty on alcoholic
  beverages and on the alcohol contained in other
  products. (COM(89)527 final)
In drafting the present proposal the Commission
has set out to designate relatively broad and
simple tax categories which take account of
existing practice. At the same time, however, it
has also had regard to the particular difficulties
which this    field presents, given the wide
diversity of treatment currently applied by Member
States not only to the different categories of
alcoholic drinks, but also to different products
within those categories. The Commission          has
sought, as far as possible, to respect that
diversity while at the same time attempting to
ensure the coherent Community-wide system which is
in the long term interest of all concerned.
The Commission    has therefore     made    specific
balanced   provisions   for    sectors    presenting
particular problems, the existence of which has
been recognized and catered for in previous
proposals, and where the normal operation of broad
categorization causes specific difficulties.
Moreover, it is accepted that further instances
may occur where specific difficulties arise in
adapting   to the Community-wide       system.   The
Commission's approach provides both a rational
framework within which such problems may be
analysed and the necessary guidelines for the
application of common solutions which preserve the
coherence of the system. When examining such cases
it is important to bear in mind certain basic
principles which the Commission has respected in
its present proposals and in its rates proposal.
Moreover, for reasons of clarity and legal
 ---pagebreak---                                                              5
        certainty, any specific provision must have as its
        basis a definition agreed at Community level.
III. BRIEF EXAMINATION   OF   THE  MAIN   FEATURES   OF  THE
     PROPOSAL
     1. Scope
        Articles 1 and 2 (beer) , 6 and 7 (still wine and
        sparkling   wine),   10   and    11    (intermediate
        products), 14 and 15 (alcohol and alcoholic
        beverages).
        a) General remarks
           The proposal sets out to tax all alcoholic
           drinks and all alcohol contained in other goods
           unless a specific exemption has been provided.
           Such a system is essential to ensure both the
           proper functioning of the internal market and
           good management at the national level. With
           that aim of comprehensive coverage in mind and
           in order to ensure uniform categorization of
           identical products throughout the Community the
           proposal sets out to define products in such
           manner as to ensure that all alcoholic drinks
           fall within one of its definitions and no
           alcoholic drink falls within more than one
           definition. The proposal therefore takes as its
           starting point the Combined Nomenclature, which
           represents      the      only       comprehensive
           classification of alcoholic beverages at the
           Community level, and modifies its approach to
           the extent necessary to meet taxation needs.
           Use of the Combined Nomenclature also ensures
           uniform treatment for products from third
           countries.
 ---pagebreak--- b) Articles 1 and 2;  Beer
   Article 1 requires that an excise duty       be
   charged on beer, and that its rate shall     be
   fixed in accordance with the requirements    of
   COM(89)527 final. Article 2 defines beer     by
   reference to CN 2203.
   There are beverages on the market which
   according to some commercial legislation are
   not regarded as beer. In order not to distort
   the conditions of competition, however, it is
   advisable to subject these products to the same
   tax system as is applicable to beers as more
   narrowly defined for other purposes. The
   definition of beer which appears in CN 2203 is
   comprehensive,   covering   all  the   products
   concerned.
c) Articles 6 and 7;  Wine
   Article 6 requires that an excise duty be
   charged on wine and that its rates shall be
   fixed in accordance with the requirements of
   COM(89)527 final.
   Article 7(1) defines still wine as all products
   of CN 2204, 2205 and 2206, except sparkling
   wine, provided that they have an alcoholic
   strength not exceeding 15% and that where their
   strength   exceeds   13%  they   contain   only
   fermented alcohol. Still wines corresponding to
   the definition of annex 1, paragraph 13,
   penultimate subparagraph of regulation 822/87
   are also included. CN 2204 covers fermented
   unaromatized grape products, CN 2205 covers
   fermented aromatized grape products and CN 2206
   covers the fermented products of fruit other
   than grapes.
 ---pagebreak---                                                              7
             The position is therefore similar to that for
             beer, as outlined above in that some of the
             products which it is proposed to tax as wine
             are not necessarily treated as wine by other
             legislation. Nevertheless, for reasons of
             competition it seems advisable to subject these
             products to the same tax system as wines
             proper. Hence their inclusion within the
             definition
             Article 7(2) defines sparkling wine not only as
             the product of CN 2204 10 (i.e. sparkling wines
             proper) but also as products falling within
             other headings covering wine presented in
             bottles with "mushroom" stoppers etc. and the
             sparkling fruit wines of CN 2206 91.
         d) Articles 10 and 11;      Intermediate products
             Article 10 requires that a duty be charged on
             intermediate products and that its rate be
             fixed in accordance with the requirements of
             COM(89)527 final.
             Article 11 defines intermediate products as
             products of CN 2204, 2205 and 2206 with
             strengths over 15% but not more than 22%, or
             with strengths exceeding 13% not made up
             entirely of fermented alcohol; table wines
             meeting the definition set s out in Annex I
             paragraph 13, penultimate sub-paragraph of
             Regulation 822/87(1) are specifically excluded
             from the category.
             As regards these products, the Commission
             retains the broad approach of its earlier
             proposal (COM(85)151 final) where it explained
             that: "between purely fermented beverages such
             as wine and fruit wine on the one side, and
             purely distilled alcoholic beverages such as
(1) UJ NU JL 84 UF 2). 3.1987 P. 44.
 ---pagebreak---                                                     8
   spirits on the other, there is a wide range of
   "intermediate   products"   with    an    actual
   alcoholic strength typically situated between
   15% and 22% by volume. Most of these products
   are based on a naturally fermented beverage to
   which alcohol and     in some cases, other
   ingredients have been added: they retain
   however the taste and other characteristics of
   naturally fermented beverages. It is the
   intention that this directive should include
   such products, whereas those which have more
   the characteristics of a spirit should be
   excluded from the scope and be taxed on the
   basis of their alcohol content, at the full
   rate for alcohol".
   In recent' years products have been developed
   which, although their strengths do not reach
   15%, are mixtures of spirits and fermented
   products which can withstand opening to the
   air, and which are in all respects practically
   indistinguishable    from    higher     strength
   intermediate products. It seems proper to tax
   such drinks at the intermediate products rate.
   The definition now proposed therefore includes
   such drinks, and is generally designed to
   provide a clear tax category for this extremely
   complex range of products.
e) Articles 14 and 15;     Alcohol  and   alcoholic
   beverages
   Article 14 requires that a duty shall be
   charged on alcohol and alcoholic beverages and
   that its rate shall be fixed in accordance with
   the requirements of COM(89) 527 final.
   Article 15 defines alcohol and alcoholic
   beverages as all products falling within CN
   codes 2207 and 2208, together with those
   products of CN codes 2204, 2205 and 2206 which
 ---pagebreak---                                                          9
      have an actual alcoholic strength exceeding
      22%. See also the note under Article 18
      (Section F - Common Provisions) below as
      regards the taxation of alcohol and alcoholic
      drinks contained in other products.
      Article 15, therefore, simply rounds off the
      comprehensive    Combined   Nomenclature   based
      approach.
2. Establishment of the duties
   a) details of charge
      Articles 3, 8, 12 and 16 of the proposal are
      technical articles fixing the charges of the
      duties.
   b) small breweries
      Articles 4(1) and (2) of the proposal permit
      Member States to apply a lower rate of duty to
      beer     produced     by    small    independent
      undertakings. The relief is in line with
      existing practice in certain Member States. A
      maximum duty differential is imposed which is
      designed to ensure that the benefit of the
      lower rate does not distort          competition
      unacceptably, and a maximum annual output of
      60,000 hi is laid down, which is designed to
      ensure that the reduced rate does not give rise
      to relief beyond the threshold of the genuine
      independent small business and does not, in
      principle, affect intra-Community movements of
      beer. It is further provided that the Community
      minimum rate must in any event be respected.
   c) "Home" brewing and wine making
      Article 4(3) permits Member States to exempt
      "home brewing" and Article 9 permits them to
      exempt "home wine-making" from excise duty.
      Member States  attitudes towards these   practices
 ---pagebreak---                                                                        10
            vary   widely.     Without   going   further    into   the
            matter, however, where there is no real danger
             of the product concerned crossing frontiers, it
             seems   clear    that   the  advent    of    the   single
             market should not affect the existing rights of
             citizens to make and consume their own drinks.
         d) spoilt beer
             Article    5 provides    for   relief    from  duty   for
             beer which     has been    returned    because    it  has
             passed    its   "sell   by"   date   or   is   otherwise
             unmerchantable. Beer is particularly liable to
             spoil and is normally produced for consumption
             within   a very     short period.     It   is  therefore
             usual    to    make   special     provision     for   the
             repayment     of   duty  on   spoilt    beer,    and  the
             Commission proposal makes         it clear that      such
             provisions are entirely lawful.
         e) low strength fermented drinks
             Article 8(3) permits Member States to apply a
             single reduced rate of duty to products of less
             than    normal     wine   strength.     The    provision
             broadly reflects the existing general practice
             in   the    Member    States    mainly    concerned.    A
             maximum duty differential         is imposed which is
             less than is generally currently granted and is
             designed    to   ensure   that   the   benefit    of  the
             lower     rate     does   not     serve     to    distort
             competition       unacceptably.      It     is    further
             provided that the Community minmum rate must in
             any event be respected.
          f) natural sweet wines
             Article 12(3) allows Member States to apply a
             single reduced rate of duty to "natural sweet
             wines" as defined in Article 13(1) of Council
             Regulation 4252/88C 1 ). The specific situation
(1) UJ MU L 373 UF 31.12.1988, P. 59.
 ---pagebreak---                                                       11
      of these products was recognized in the
      Commission's 1985 proposal on Intermediate
      Products and the current provision permits all
      Member States to apply a reduced rate to such
      goods. A maximum duty differential is imposed,
      which is less than is currently granted, and
      which is designed to ensure that the benefit of
      the lower rate does not distort competition
      unacceptably. It is further provided that the
      Community minimum rate must in any event be
      respected.
3. Control
   Article 13 provides that intermediate products
   shall be manufactured in warehouse from duty-free
   materials. Matters of control are generally dealt
   with in a separate proposal for a directive.
   However, in the case of intermediate products -
   which are essentially mixtures of two drinks
   taxable at different rates, but for which a
   separate rate has been specifically provided - it
   seems necessary to ensure at the outset by a
   common provision that the intended rate is
   charged.
4. Exemptions
   Article 17 provides for the exemptions to the
   various duties established by the proposal. In
   practice the exemptions largely concern the
   spirits duty. However, where applicable - and
   should the contingency ever arise - the exemptions
   are intended to apply to all duties. Most of the
   exemptions are self-explanatory, but some comments
   are required:
   - Article 17(1)(a) exempts drinks with an alcohol
     content not exceeding 1.2%. Member States
     generally apply some such exemption, but there
     is no agreement on its precise limitations. The
     proposal opts for an across-the-board exemption
 ---pagebreak---                                                           12
for reasons of competition. The 1.2% cut off
point is chosen because, on the one hand this
strength is sufficiently low to justify special
treatment, and on the other hand it is not so
low as to result in products totally lacking in
all the characteristics of alcoholic drinks.
Article 17(1)(b) and (c) together with Article
17(3) exempt both "completely denatured" alcohol
(for general use in industry etc.) and other
denatured alcohol for use in perfumes toiletries
and cosmetics or for external medical use.
Member States generally demand much more noxious
dénaturants for alcohol for general industrial
purposes than they demand for alcohol used for
the particular purposes set out at sub-paragraph
1(c). The proposal respects that distinction.
Although the ideal system of denaturing might
well involve the Community-wide application of
common rules, so that further action in this
field cannot be excluded, it has not been
considered necessary to set up common rules at
the present stage. The proposal                 therefore
requires        mutual   recognition     of    denaturing
formulae and sets up at Article 17(3), a system
for the mutual exchange of the necessary
information.
Exemptions         from   duty    for    deliveries    to
diplomatic         representations     and     the   like
 (international organizations, armed forces etc.)
are dealt with in the proposal on common
provisions for all exciseable products (COM(90)
 . . . ) . Exemption for ships' stores and the like,
in         particular    as    regards      international
transport, will be dealt with in a separate
directive.
 ---pagebreak---                                                       13
5. Common Provisions
   Article 18 requires alcohol and alcoholic drinks
   present in other products to be taxed on the
   quantity present at the rate appropriate to the
   alcohol or alcoholic drink concerned.
6. Final Provisions
   Article 19 makes reference to the provisions
   providing for the establishment of an Excise
   Committee in the horizontal directive proposal.
   Article 20 sets a deadline for implementation of
   the proposed Directive and communication to the
   Commission of the relevant national provisions.
   Article 21 formally addresses the Directive to the
   Member States.
 ---pagebreak---                           - 14 -
                       Proposal for a
                     COUNCIL DIRECTIVE
 on the harmonization of the structures of excise duties
         on alcoholic beverages and on the alcohol
                contained in other products
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having  regard  to  the  Treaty  establishing  the   European
Economic Community, and in particular Article 99 thereof,
Having regard to the proposal from the Commission,
Having regard to the opinion of the European       Parliament
(1)
Having regard to the opinion of the Economic and Social
Committee (2)
Whereas  Council  Directive                   (3) lays   down
minimum and target rates of excise duty to be applied in
the Member States to alcohol, wine, beer and intermediate
products ;
Whereas it is necessary, if those duties are to be applied
in a uniform manner, to determine common definitions for
all the products concerned;
Whereas it is useful to base such definitions on those set
out in the Combined Nomenclature which represents an
established comprehensive system providing a suitable
basis for taxation purposes;
Whereas it is necessary to ensure that duty is charged on
actual quantities delivered or certified missing;
(1) ...
(2) ...
(3) ...
 ---pagebreak---                            - 15 -
Whereas,in the case of beer, the system of taxing the worts
causes great difficulties in assessing the charge and is
susceptible of distorting competition between breweries, so
that it is necessary to ensure that the tax is applied
throughout the Community to the actual quantity of end
product which leaves the brewery;
Whereas, in the case of beer, it is possible within certain
limits to permit Member States to apply the duty to
gravity bands of more than one degree Plato, provided
always that no beer is charged at less than the Community
minimum rate;
Whereas, in the case of beer, a common solution is required
permitting Member States to apply a reduced rate of duty
to the products of independent small undertakings,
provided that such a reduced rate should not serve to
distort competition within the internal market;
Whereas, in the case of beer and wine, it is advisable to
permit Member States to exempt from duty home-made
products which are not produced for commercial purposes;
Whereas, in view of beer's short life span and its
propensity to spoil, it is necessary to permit Member
States to refund duty on beer destroyed as unfit for
consumption;
Whereas it is advisable to permit Member States on a
common basis to apply, on the one hand, a reduced rate of
duty to ciders and similar products of less than normal
wine strength (n.e. 8.5%) and, on the other hand, to apply
a reduced rate of the intermediate products duty to
natural sweet wines, provided that such reduced rates
should not serve to distort competition within the
internal market;
Whereas in the internal market it is necessary to ensure
that intermediate products are taxed in their final form
 ---pagebreak---                          -16-
at the rates provided for in the case of such prodxts, and not at the
rates applicable to their constituent materials prior to
their manufacture, so that it is necessary to require that
intermediate products be manufactured in warehouses             from
duty-free constituent materials;
Whereas it is necessary to lay down precisely at Community
level the exemptions which apply to all goods which cross
frontiers;
Whereas, however, it is possible to permit Member States
to apply their own conditions to exemptions tied to end
uses within the territory of the State;
Whereas it is necessary to tax the alcohol and alcoholic
drink present in other products on the quantity of alcohol
present and at the rate appropriate to the alcohol or
alcoholic drink concerned;
HAS ADOPTED THIS DIRECTIVE:
 ---pagebreak---                            - 17 -
SECTION A - BEER
I.   SCOPE
                          Article 1
     1. Member States shall apply an excise duty to beer
        in accordance with the provisions         of this
        Directive.
     2. Member States shall fix their rates in accordance
        with Directive [C0ft(89) 527 final"]..
                          Article 2
     For the purposes of this Directive the term "beer"
     covers any product falling within CN code 2203.
 ---pagebreak---                             - 18 -
II. ESTABLISHMENT OF THE DUTY
                            Article 3
    1. The excise duty levied by Member States on beer
        shall be fixed by reference to the number of
       hectolitre/degrees Plato of finished product released
        for consumption or recorded as missing and
        exceeding any allowance granted. In assessing the
        charge to duty on beer in accordance with the
        requirements of Directive [(COM(89) 527 final)],
         Member States shall ignore fractions of a degree Plato.
    2. Member States may divide beers into categories
        consisting of no more than 4 degrees Plato and
        charge the same rate of duty per hectolitre on all
        beers falling within each category. Such rates,
        expressed as a charge per hi/degree Plato shall
        invariably equal or exceed the minimum rate laid
        down     in    Article [7a] of Directive [(C0M(89) 527 final)]
                            Article 4
     1. Member States may apply a single reduced rate of
        excise duty to beer brewed by independent small
        undertakings within the following limits:
        - the reduced rate shall not be applied to
           undertakings producing more than 60.000 hi of
           beer per year;
        - the reduced rate shall not be set more than 20%
           below the standard national rate of excise duty;
        - the reduced rate shall not fall below the level
           of the minimum rate laid down in Article [7a]
           of Directive [(C0M(89) 527 final)].
     2. Member States shall ensure that any reduced rate
        they may introduce applies equally and in a
        straightforward manner to beer delivered into
 ---pagebreak---                                 - 19 -
         their territory from independent small breweries
         situated in other Member States.
     3. Subject to such conditions as they shall lay down
         to ensure the straightforward application of the
         exemption, Member States may exempt from excise
         duty beer produced by a private individual and
         consumed by the producer, members of his family
         living under his roof, his employees or his
         guests.
                               Article 5
     The e x c i s e duty paid on beer withdrawn from t h e
     market and d e s t r o y e d because i t s c o n d i t i o n or age
     renders i t u n f i t f o r consumption may be refunded i n
     accordance w i t h the conditions and procedures laid down
     by Member S t a t e s . Each Member S t a t e s h a l l e n s u r e t h a t
     those conditions and procedures shall apply equally to both beer
     produced within the Member State and beer delivered into i t s
     territory from other Member States.
SECTION B - WINE
I.   SCOPE
                               Article 6
     1. Member States shall apply an excise duty to wine
         in accordance with the provisions                        of this
         Directive.
     2. Member States shall fix their rates in accordance
         with Directive /."(COM(89) 527 final)./.
 ---pagebreak---                                  - 20 -
                              Article 7
      For the purpose of this Directive:
      1. The term "still wine" covers all products falling
         within CN codes 2204, 2205 and 2206, except
          sparkling wine as defined in point 2 of this
          Article, provided that the products have an actual
          alcoholic strength by volume not exceeding 15% vol and
          that the alcohol contained in products of an
          actual alcoholic strength by volume exceeding 13% vol
          is entirely of fermented origin. Also to be
          considered still wines are products between 15 and 17%
          vol which meet the definition set out in Annex I, point 13,
                                                                         (1 )
          penultimate subparagraph of Council Regulation (EEC) No 822/87
      2. The term "sparkling wine" covers all products
          falling withiN CN codes 2204 10, 2204 21 10, 2204
          29 10 and 2206 00 91 provided that the products
          have an actual alcoholic strength by volume not
          exceeding 15% vol and that the alcohol contained in
          products of an actual alcoholic strength by volume
          exceeding 13% vol is entirely of fermented origin.
II.   ESTABLISHMENT OF THE DUTY
                               Article 8
       1. The excise duty levied by Member States on still
           and on sparkling wine shall be fixed by reference
           to the number of hectolitres of finished product
           released for consumption or recorded as missing
           and exceeding any allowance granted.
       2. Except     as    provided     in  paragraph 3,
          Member States shall levy the same rate of excise
           duty on all products chargeable with the duty on
           still wine. Similarly they shall levy the same
           rate of duty on all products chargeable with the
           duty on sparkling wine.
(1) 0J No L 84, 27.3.1987, p. 1.
 ---pagebreak---                              - 21 -
        Subject to the following conditions, Member States
        may apply a        single    reduced   rate    of
        duty on still wines and a single reduced rate of
        duty on sparkling wines restricted in each case
        to products which have an actual alcoholic
        strength by volume not exceeding 8.5% vol,
        - the reduced rate shall not be set more than 50%
           below the standard national rate of excise duty;
        - the reduced rate shall not fall below the level
           of the minimum rate laid down in Article /6a/ of
         -, Directive MC0M(89) 527 final)"/.
                           Article 9
     Subject to such conditions as they shall lay down to
     ensure the straightforward application of this
     provision, Member States may wholly or partially
     exempt from excise duty wine produced by a private
     individual, or by a production undertaking from its
     own agricultural produce, and in each          case consumed
     by the producer, members of his family living under
     his roof, his employees or his guests.
SECTION C - INTERMEDIATE PRODUCTS
I.   SCOPE
                           Article 10
     1. Member States shall apply an excise duty to
        intermediate products in accordance with the
        provisions of this Directive.
     2. Member States shall fix their rates in accordance
        with Directive /J(C0M(89) 527 final)?.
 ---pagebreak---                                 - 22 -
                               Article 11
        1. Except as provided at paragraph 2 of this Article,
           for the purposes of this Directive the term
           "intermediate       products"  covers     all    products
           falling within CN codes 2204, 2205 and 2206 which
           have an actual alcoholic strength by volume
           exceeding 15% vol but not exceeding 22% vol, or which
           have an actual alcoholic strength by volume
           exceeding 13% vol and in which the alcohol content is
           not entirely of fermented origin.
        2. The term "intermediate products" shall not include
           products which meet the definition set out in
           Annex I, point 13, penultimate subparagraph of Regulation
            (EEC) No 822/87.
  II. ESTABLISHMENT OF THE DUTY
                               Article 12
        1. The excise duty levied by Member States on
           intermediate products shall be fixed by reference
           to the number of hectolitres of finished product
           released for consumption or recorded as missing
           and exceeding any allowance granted.
        2. Except     as    provided   in  paragraph     3,
           Member States shall charge the same rate of duty
           on all products chargeable with the duty on
            intermediate products.
        3. Subject to the following conditions Member States
           may apply a single reduced rate of duty to those
            intermediate products which meet the conditions
            laid down in Article 13(1) and (2) of Council Regulation
           (EEC) No 4252/88(1);
(1) 0J No L 373, 31.12.1988, p. 59.
 ---pagebreak---                               - 23 -
          the reduced rate shall not be set more than 50%
          below the standard national rate of excise duty,
          the reduced rate shall not fall below the
          minimum rate laid down in Article /5a/ of Directive
          /JC0M(89) 527 final)"/.
III. CONTROL
                           Article 13
     Member States shall ensure that intermediate products
     are manufactured        in warehouses from constituent
     distilled and fermented alcholic drinks which are
     held in suspension of the relevant excise duties.
SECTION D - ALCOHOL AND ALCOHOLIC BEVERAGES
I.   SCOPE
                           Article 14
     1. Member States shall apply an excise duty to
        alcohol and alcoholic beverages in accordance with
        the requirements of this Directive.
     2. Member States shall fix their rates in accordance
        with Directive /_~(C0M(89) 527 final).?.
                           Article 15
     For the purposes of this Directive the term "alcohol
     and alcoholic beverages" covers all products falling
     within CN codes 2207 and 2208, together with those
     products of CN codes 2204, 2205 and 2206 which have
     an actual alcoholic strength by volume exceeding 22% vol
 ---pagebreak---                                  - 24 -
   II. ESTABLISHMENT OF THE DUTY
                               Article 16
         The excise duty on alcohol and alcoholic beverages
         shall be fixed per hectolitre of pure alcohol at
         20°C, and shall be calculated by reference to the
         number of hectolitres of pure alcohol actually
         cleared for consumption or recorded as missing and
         exceeding any allowance granted. Member States shall
         charge the same rate of duty on all products
         chargeable with the duty on alcohol and alcoholic
         beverages.
   SECTION E - EXEMPTIONS
                                Article 17
    1. The products covered by this Directive shall be exempt
       from excise duty:
       a) when they consist of alcoholic beverages of an
           actual alcoholic strength by volume not exceeding
           1.2% vol;
       b) when completely denatured in accordance with the
           requirements of any Member State;
       c) when denatured in accordance with the requirements
           of any Member State, and used for the manufacture of
           perfumes, toiletries and cosmetics or for external
           medical use and conforming to the provisions of
           paragraph 3;
       d) when used for the production of vinegar as defined
           in CN code 2209;
       e) when used for the production of medicines as defined
           by Council Directive 65/65/EEC(1)-
(1) 0J No 22, 9.2.1965, p. 369/65.
 ---pagebreak---                                                 - 25 -
2 . The products covered by t h i s D i r e c t i v e may be exempt
    from e x c i s e duty under the conditions which t h e Member
    S t a t e s s h a l l l a y down:
    a) when u s e d as a sample f o r a n a l y s i s , f o r necessary p r o d u c t i o n
         t e s t s , or f o r s c i e n t i f i c purposes;
    b)    when used f o r s c i e n t i f i c      research;
    c)    when used f o r medical purposes i n h o s p i t a l s .
    Before t h e d a t e of implementation o f t h i s D i r e c t i v e ,
    and t h r e e months b e f o r e any intended subsequent change
    i n n a t i o n a l law, each Member S t a t e s h a l l communicate t o
    t h e Commission, t o g e t h e r w i t h a l l r e l e v a n t i n f o r m a t i o n ,
    t h e formulae of t h e d é n a t u r a n t s which i t i n t e n d s t o
    employ from 1 January 1993 for the purposes of paragraphs (1)(b)
    and (1)(c).           The Commission shall transmit the communications t o .
     the other Member States within one month of receipt.
SECTION F - COMMON PROVISIONS
                                              Article 18
To the quantity of alcohol or alcoholic drink contained in
any manufactured product Member States shall apply the
excise duty appropriate to the category to which the
alcohol or alcoholic drink concerned belongs.
 ---pagebreak---                                 - 26 -
SECTION G - FINAL PROVISIONS
                              Article 19
Where necessary, the Community measures to give effect to
this      Directive      shall     be       adopted   by the   Commission
according to the procedure provided                 for  in Title   VI  of
Council       Directive                      concerning    the    general
arrangements for products subject to excise duty and on
the holding and movement of such products v,/ .
                              Article 20
Member States s h a l l bring into force, not l a t e r than
31 December 1992 the laws, regulations and administrative
provisions necessary t o comply with t h i s D i r e c t i v e .
When the Member States adopt such provisions they shall contain a reference
to this Directive or shall be accompanied by such a reference on o f f i c i a l
publication.   The Member States s h a l l lay down the manner in which such
reference shall be made.
                              A r t i c l e 21
This Directive is addressed to the Member States
Done at                                                        For the Counci I
(1) 0J No        ,      , p.       (C0M(90)        ).
 ---pagebreak---                                     - 27 -
                    FICHE D'EMPACT SUR LES MIE ET L'EMPLOI
La   présente  proposition  de  directive  concernant   l'harmonisation  de   la
structure des droits d'accises sur les boissons alcooliques et sur l'alcool
contenu dans d'autres produits est nécessaire dans le cadre de l'abolition
des frontières fiscales et s'intègre dans      l'ensemble  des mesures prises
pour l'achèvement du marché intérieur.
I.     Obligations administratives découlant de l'application de la présente
       directive pour les entreprises :
       - néant.
II.    Quels sont les avantages pour les entreprises ?
       - néant.
 III.  Y-a-t-lI des   Inconvénients pour  les entreprises en termes de coûts
       supplémentaires ?
       - l'application   de  la présente  directive   n'entraînera  aucun   coût
         supplémentaire pour les entreprises.
 IV.   Effets sur remploi :
       - néant.
V.     Les partenaires sociaux n'ont pas été consultés.
VI.    Une approche alternative moins contraignante n'est pas envisageable
       dans le cadre de l'abolition des frontières fiscales.
 ---pagebreak---                                        28 -
                              FiCHE FINANCIERE
L'application de la présente proposition de directive n'entraînera aucune
augmentation des ressources propres de la Communauté.
 ---pagebreak---  ---pagebreak---  ---pagebreak---                                                                                ISSN 0254-1475
                                                                COM(90) 432 final
                                                      DOCU
EN                                                                                         09
                                   Catalogue number : CB CO-90-561-EN-C
                                                               ISBN 92-77-65610-7
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