Explanatory Memorandum to COM(2008)78 - General arrangements for excise duty - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2008)78 - General arrangements for excise duty. |
|---|---|
| source | COM(2008)78  |
| date | 14-02-2008 |
- Grounds for and objectives of the proposal
The provisions contained in 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 i need to be reviewed to take into account the introduction of the Excise Movement and Control System (hereafter: EMCS). The EMCS has been put into place following Decision No 1152/2003/EC of the European Parliament and of the Council of 16 June 2003 on computerising the movement and surveillance of excisable products i .
As a result, notably, the provisions relating to movements under suspension of excise duty need to be adapted so as to allow such movements to be covered by procedures under this new system. Changes to this effect would provide a simplified and paperless environment for trade, while permitting more integrated, faster and risk oriented control approaches for excise authorities (cf. third and fourth recital of Decision 1152/2003/EC).
Apart from these new provisions, other amendments of the rules set out in Directive 92/12/EEC are considered to be necessary such as:
- to update the language used in the directive, taking into account new legislative standards;
- to recast the text enhancing the logical structure and to take out those provisions which have lost relevance over time;
- to take account of legal developments and new legal concepts;
- to simplify and modernise the excise procedures, with the aim of reducing excise obligations for traders in particular for traders carrying out cross-border business without compromising excise controls.
Given the nature and reach of such changes, it is appropriate to replace Directive 92/12/EEC in its entirety.
The new text proposed also incorporates the essence of an earlier proposal, made with a view to modify Articles 7 to 10 of that Directive and contained in document COM(2004)227 i.
- General context
Directive 92/12/EEC ensures the proper functioning of the internal market with regard to general issues connected with the free movement of excise goods.
Review of this legislation will increase legal certainty for traders and will allow traders and administrations to better benefit from the possibilities offered by IT procedures.
Discussions in the Council on the Commission's proposal for a modification of Articles 7-10 of Directive 92/12/EEC (included in COM/2004/227) were halted in January 2005, awaiting further legal developments as well as initiatives tending to review and modernise the Directive. The said proposal is now integrated into Chapter V of the new text submitted. Some modifications have been made in order to improve the wording and structure of the text, and in order to align these provisions to the other changes relating to movements under duty suspension.
- Existing provisions in the area of the proposal
The text submitted is intended to replace 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 goods.
- Consistency with the other policies and objectives of the Union
This proposal is in line with the main policies and objectives of the Union. It seeks to improve the existing rules and to adapt them to the current circumstances. The aim is to simplify procedures and to increase transparency for intra-Community trade, notably through a procedure in which movement of excise goods under suspension of excise duty take place under EMCS. This new procedure also facilitates risk based monitoring procedures for national administrations.
- Consultation of interested parties
On 20 January 2006, the Commission launched an on-line consultation on the web-site of its Directorate General for Taxation and Customs Union. The consultation period ended on 30 April 2006.
The consultation was based on a paper which provided information on the current legal framework and various aspects of the forthcoming reform. It underlined the need to review Community excise legislation to provide the necessary legal basis for the EMCS. The paper also gave an overview of other modifications which could be considered in the context of the review process.
A total of 73 contributions were received. Of that total, 20 were from national and European federations or associations, 52 were from business and one from a semi-governmental retail organisation. The great majority of respondents shared the view that the existing provisions should be reviewed and modernised and that in particular operation of the EMCS should be integrated into the applicable rules.
- Collection and use of expertise
The proposal was developed in close cooperation with a specialists working group under the auspices of the Excise Committee (which itself was established under Directive 92/12/EEC). The Commission's services undertook a number of bilateral discussions with interested Member States to further discuss the proposal.
- Impact assessment
Among the new elements contained in this proposal, the core is constituted by the legal rules ensuring application of the EMCS. The ensuing impact has to be attributed in essence not to the text proposed here but to Decision No 1152/2003/EC, through which creation of the EMCS was decided. As explained above, the new system, in particular, simplifies movements under suspension of excise duty and facilitates appropriate controls by Member States.
To the extent this proposal incorporates changes proposed in COM(2004)227, a detailed analysis of those changes has already been made in that document.
3)
Contents
- Legal elements of the proposal
- Budgetary implications
- 2) Consultation of interested parties and impact assessment
- 5. ADDITIONAL INFORMATION
- Chapter I: General provisions
- Chapter II: Incurrence of excise duty
- Chapter III: Production, processing and holding
- Chapter IV: Movement of excise goods under suspension of excise duty
- Chapter V: Movement and taxation of excise goods after release for consumption
- Chapter VI: Miscellaneous
- Chapter VII: Final provisions
- Summary of the proposed action
To introduce the legal basis for the use of the EMCS along with some further changes aiming at more transparency for the taxation of excise duty. The proposal integrates the Commission's earlier proposal made with a view to modify Articles 7-10 of Directive 92/12/EEC (COM/2004/227).
- Legal basis
Article 93 of the Treaty.
- Subsidiarity principle
The subsidiarity principle applies insofar as the proposal does not fall under the exclusive competence of the Community.
The object of the proposal is to replace Directive 92/12/EEC by provisions fulfilling the same function, namely to ensure the proper functioning of the internal market in the particular field of excise goods.
The subsidiarity principle is respected, since this objective cannot be sufficiently achieved by actions of the Member States and can be better achieved at Community level.
- Proportionality principle
The proposal complies with the proportionality principle for the following reason.
The Directive suggested is intended to replace Directive 92/12/EEC, in establishing provisions pursuing the same objective, taking account of the current technical and legal context. Like Directive 92/12/EEC, it does not go beyond what is necessary to ensure the proper functioning of the internal market in the particular field of excise goods.
- Choice of instruments
Proposed instruments: Directive.
The proposal is to replace the current Directive 92/12/EEC by a Directive fulfilling the same function. Means other than a Directive would not be adequate in nature.
The adoption of the proposal will have no impact on the Community budget. Any impact in the matter, relating to the installation of EMCS, results from Decision 1152/2003/EC.
- Repeal of existing legislation
The adoption of the proposal will repeal existing legislation, namely Directive 92/12/EEC. A transitional period is foreseen in which Member States may still allow movements under suspension of excise duty to take place under cover of accompanying documents in paper form, in accordance with the said Directive.
- Detailed explanation of the proposal
The following detailed explanation article by article focuses on provisions which are new or have been changed in substance in comparison with the corresponding provisions of Directive 92/12/EEC. The correlation tables attached to the proposed new directive should be used to correlate the new with the existing provisions of Directive 92/12/EEC.
Article 1 refers to the nature of the excise duty as being a tax on the consumption of excise goods. The definition of the different excise goods (which is necessary to identify exactly which goods are subjected to the provisions of this Directive), the structure of the excise duty to be applied (e.g. per hl; per degree alcohol; per 1000 pieces, etc.), the scope of possible exemptions, as well as the minimum rates of duty that Member States have to respect shall be set out in specific Directives.
Article 2(1 ) corresponds to Article 5 i of Directive 92/12/EEC. However, the word 'extraction' has been added in point a) in order to clarify that direct extraction from the soil is also covered by the word 'production', as specified in Article 21 i of Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity i.
Articles 3 i and 3 i provide that the formalities relating to importation or exportation laid down by the Community customs provisions in force shall apply mutatis mutandis to the importation from or exportation to the territories referred to in Article 5 i which form part of the Customs territory of the Community but fall outside the territorial scope of this Directive. These formalities already apply to excise goods by virtue of Articles 275 and 279 of Directive 2006/112/EC on the common system of VAT i. However, to clarify these situations, it is advisable to include these provisions in this directive as well.
In order to avoid duplication of procedures, Article 3 i provides that for excise goods under a customs suspensive procedure or arrangements, the provisions laid down in this Directive on the production, processing and holding as well as the movement under suspension of excise duty shall not apply.
Article 4 provides a number of new or largely modified definitions and retains some of the old ones. Definitions containing normative provisions, such as the obligation to have an authorisation, have been moved to the corresponding normative sections.
Articles 5 and 6 provide where this Directive and the specific excise Directives apply. To enhance clarity, the structure of these provisions has been aligned to the structure used in Articles 6 and 7 of Directive 2006/112/EC on the common system of VAT.
In comparison with Directive 92/12/EEC, Gibraltar has been added to the list of territories in Article 5 i (territories not forming part of the customs territory of the Community to which this Directive and the specific excise Directives do not apply), in order to remove any doubt as to whether, in view of the Act of Accession of the UK, the Community provisions on excise duty apply to Gibraltar as well. Furthermore, the words 'subject to measures to adjust to their extreme remoteness' have been added in Article 5 i concerning the Canary Islands, aligning as such this paragraph to Article 5 i concerning the French overseas departments.
In Article 7 i , replacing the first subparagraph of Article 6 i of Directive 92/12/EEC, the reference to shortages has been removed, as the occurrence of shortages under a duty suspension arrangement automatically constitutes a release for consumption as defined in Article 7 i. In Article 7 i, replacing the second subparagraph of Article 6 i of Directive 92/12/EEC, the references to 'irregular' events constituting a release for consumption have been removed, as the events constituting a release for consumption should be considered to cover both regular and irregular events.
The second subparagraph of Article 7 i contains a slightly modified definition of importation of excise goods, currently in Article 5 i, second and third subparagraphs of Directive 92/12/EEC.
Article 7 i provides that excise goods shall not be considered released for consumption in case of their total destruction or irretrievable loss, including losses inherent in the nature of the goods. This provision replaces and simplifies Article 14 of Directive 92/12/EEC. In line with the nature of excise duty as a tax on the consumption of excise goods, the condition for the application of the proposed rule is whether the goods placed under a suspension arrangement have been destroyed and/or can still be used and therefore effectively be released - and made available - for consumption. Compared to current legislation, it will no longer be necessary for the competent authorities to establish the reason for the occurrence of the shortage, in terms of fortuitous events of force majeure . A further important difference with Article 14 of Directive 92/12/EEC is that, in case of intra-Community movements under suspension of excise duty, it will be for the Member State where the destruction or the loss of the goods occurs instead of the Member State of destination to decide on the application of Article 7 i.
Article 8, second subparagraph , clarifies that Member States are competent to define the procedures for reimbursement and remission of excise duty as well. The present provision (Article 16 i of Directive 92/12/EEC) only refers to provisions for levying and collecting duty.
Article 9 replaces and simplifies Article 20 of Directive 92/12/EEC, providing for rules to identify the Member State entitled to recover excise duty in case of irregularities that occurred during the movement of excise goods under suspension of excise duty. Article 9 i defines the term 'irregularity' as a situation in which a movement under suspension of excise duty of excise goods has not ended in accordance with Article 19 i. This means that all or part of the goods concerned have not been subject to the latter provision. Furthermore, the term 'offence' has been removed as the term 'irregularity' covers offences as well. The principle laid down in Article 20 i of Directive 92/12/EEC that excise duty shall be due in the Member State where the irregularity has been committed is already covered by the new Article 8 and should not be repeated here. Article 9 i then only deals with the situation in which it is not possible to determine where the irregularity took place and generalises the rule that in that situation the release for consumption is deemed to have occurred in the Member State of dispatch. This includes the situation in which the irregularity has been detected in another Member State than the Member State of dispatch, at present covered by Article 20 i of Directive 92/12/EEC. It also includes the situation where the excise goods do not arrive at their destination referred to in Article 20 i of Directive 92/12/EEC.
Article 10 stipulates the conditions for reimbursement or remission of excise duty, other than specified in the cases of Articles 31 i and 34 i and replaces Article 22 i and i of Directive 92/12/EEC. In comparison with the latter provisions, which only cover a specific situation, the proposal lays down as a general principle that it is for Member States to determine the cases and the conditions in which a reimbursement or remission of excise duty is granted. Reimbursement or remission should, however, not be possible in case this would allow the exempt consumption of excise goods other than those provided for under Article 11. The complex procedure of Article 22 i of Directive 92/12/EEC can be removed as it becomes redundant when the EMCS becomes operational.
Articles 11 and 12 take over the provisions concerning exemptions from Article 23 i and (1a.) of Directive 92/12/EEC. The procedure of Article 23 i of Directive 92/12/EEC is not reproduced in the proposal. It has never been used and can be considered to be covered by paragraph 1(e) of Article 11 of the proposal.
Article 13 provides an arrangement for tax-free shops which allow such shops situated in an airport or seaport only to supply excise goods under exemption of excise duty to travellers taking a flight or sea-crossing to a third territory or to a third country. In principle, there are no limits as to the quantity or value of the goods that can be purchased but those quantities can be restricted by Member States to prevent any possible evasion, avoidance or abuse.
Articles 14 and 15 correspond to Articles 11 to 13 of Directive 92/12/EEC.
This Chapter lays down the basic provisions and the procedures that apply to the movement of excise goods under suspension of excise duty under the EMCS.
Article 16 provides for the possibility to move excise goods under suspension of excise duty and enumerates the different movement destinations and various movement scenarios. Paragraph 1(b) provides for the possibility to start the movement at the place of importation under the responsibilty of a registered consignor. Paragraph 2 allows the movement to continue to a place of direct delivery, which is a place indicated by the tax warehousekeeper or registered consignee under his responsibility.
Article 17 contains the provisions concerning the guarantee to be provided to cover the risk inherent in the movement under suspension of excise duty. In comparison with Article 15 i of Directive 92/12/EEC, paragraph 1 provides a much wider circle of persons who shall be allowed to act as guarantor, so as to allow traders to better align the fiscal responsibility with the commercial responsibility of the movement.
Article 18 , replacing Article 16 of Directive 92/12/EEC, contains the specific provisions concerning movements destined for a registered consignee or a temporary registered consignee (respectively called 'registered trader' and 'non-registered trader' in Directive 92/12/EEC). Provisions concerning chargeability and payment of duty have been removed from this Article and included in Article 7. The provisions concerning temporary registered consignees have been adapted to take account of the fact that under the EMCS, the authorisations of these operators will be included in the electronic database referred to in Article 22 of Council Regulation (EC) No 2073/2004 of 16 November 2004 on administrative cooperation in the field of excise duties i.
Article 19 defines when a movement under suspension of excise duty shall be deemed to begin and end. This is necessary to determine the field of application of the various rules relating to movement under suspension of excise duty. It also provides the exact moment at which the responsibility for the goods is moved to and from the person responsible for the movement under excise duty suspension.
Article 20 i provides that a movement of excise goods shall be considered to take place under suspension of excise duty only if it takes place under cover of an electronic administrative document (hereinafter: e-AD.) Paragraph 2 provides that the e-AD shall be submitted by the consignor using the computerised system developed under Decision No 1152/2003/EC (hereinafter referred to as the computerised procedure). The e-AD replaces the current paper accompanying document prescribed in Article 18 i of Directive 92/12/EEC. Paragraphs 3 to 6 describe the various stages that the e-AD has to pass through and provides, in particular, for the assignment of a unique Administrative Reference Code (ARC) which must be available throughout the movement.
Paragraphs 7 and 8 lay down specific provisions concerning respectively the possibility to cancel an e-AD before the start of the movement and to change the destination of the movement.
Article 21 allows for the data for the submitted e-AD (limited to energy products) to be filled in at a later stage.
Article 22 provides that the Member States may allow the consignor to split a movement of energy products.
Articles 23 and 24 provide for the use of an electronic report of receipt or the report of export, for proof that the excise movement has ended correctly and describe the various stages that it has to pass through. These reports replace the copy of the paper accompanying document to be returned to the consignor for discharge, prescribed in Article 19 of Directive 92/12/EEC.
Article 25 i stipulates that alternative proof of the correct ending of a movement may be provided in the absence of the electronic reports referred to in the previous Articles. Such proof is already accepted by the Member States at present on the basis of an agreement reached in the Committee on Excise Duty. To enhance legal certainty, this possibility should be included in the directive.
Article 26 lays down the procedures to be used when the computerised system is not available. Paragraph 1 concerns the submission of the e-AD and paragraph 2 concerns the declaration to be submitted by the consignor in case of change of destination and splitting of a movement.
Article 27 reflects the fact that, for the EMCS to fulfill its function properly, a higher degree of procedural harmonisation would be required, as compared to current legislation. It is proposed that the new Directive shall lay down the core elements of the procedure, but that a number of technical details shall be provided in implementing legislation.
Aricle 28 allows Member States to simplify the procedures for movements which take place entirely on their territory.
Article 29 allows for a simplification of the formalities for the movement of excise goods under suspension of excise duty, by agreement between two or more Member States for frequent and regular movements between certain economic operators. This provision replaces Article 19 i, third subparagraph of Directive 92/12/EEC which only referred to the procedure for discharging the accompanying document. Article 29 extends the possibility to simplify the formalities to the submission of the e-AD as simplifying discharge only is not meaningful under the EMCS.
Article 29 i allows for the possibility for the Member States to simplify the procedures for movements via fixed pipelines, at present included in Commission Regulation (EEC) No 2719/92 of 11 September 1992 on the accompanying administrative document for the movement under duty-suspension arrangements of products subject to excise duty i.
This Chapter replaces Articles 7 to 10 of Directive 92/12/EEC and reproduces the Commission's earlier proposal for a modification of these articles included in COM(2004)227 of 2 April 2004. A detailed explanation of this Chapter can be found in the explanatory memorandum included in COM(2004)227.
Chapter V distinguishes three different scenarios in relation to the excise goods being held and or moved between Member States after the release for consumption.
- Article 30 concerns movements of goods acquired by private individuals. This Article replaces Articles 8 and 9 of Directive 92/12/EEC and corresponds to point 2 and 3 of Article 1 of the proposal included in COM(2004)227.
- Articles 31 to 33 concern excise goods which have already been released for consumption in one Member State and are held for commercial purposes in another Member State. These Articles replace Articles 7 of Directive 92/12/EEC and corresponds to point 1 of Article 1 of the proposal included in COM(2004)227.
- Article 34 provides for procedures applicable to sales made by traders who take responsibility, directly or indirectly, for the transport of excise goods to private individuals established in another Member State (so-called 'distance selling'). This Article replaces Articles 10 of Directive 92/12/EEC and corresponds to point 4 of Article 1 of the proposal included in COM(2004)227.
Article 35 provides for a similar treatment of the destruction or loss of excise goods transported between Member States after the release for consumption, as for the destruction or loss occurring during a movement under suspension of excise duty.
Article 36 does the same concerning the treatment of irregularities. These provisions correspond to point 5 of Article 1 of the proposal included in COM(2004)/227.
Article 37 allows Member States the possibility to impose on its territory the use of tax or fiscal markings. In comparison to Article 21 of Directive 92/12/EEC, the first paragraph has been completed in order to clarify that tax markings or identification marks may also be required when excise goods are transported to a Member State outside suspension of excise duty, in the situations referred to in Articles 31 and 34 of the proposal. Moreover, Article 37 contains a number of elements intended to clarify, in view of the judgment of the Court of Justice of the European Communities in Case C-374/06, BATIG , that such markings are not to give rise to a double tax burden, directly or indirectly. The last paragraph of Article 21 of Directive 92/12/EEC has not been included in the proposal as the use of the e-AD is already implied by the reference to Article 7 i in the first paragraph of Article 34.
Article 38 allows Member States to exempt small wine producers from the requirements laid down in chapters III and IV.
Article 39 corresponds to paragraph 5 of Article 23 of Council Directive 92/12/EEC.
Article 40 concerns the Committee on excise duty which shall be designated as a regulatory committee under the provisions of Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission i. Article 41 provides that the Committee shall, in addition, examine all issues raised by its Chairman to discuss the application of the Community provisions on excise duty.
Article 42 stipulates that the current Directive 92/12/EEC shall be repealed as of 1 April 2009 which is the foreseen date of entry into application of the computerised system. Article 43 provides that for an intermediate period, ending 31 December 2009 Member States may allow that some of the provisions relating to the use of the paper-based procedure for the monitoring of the movement of excise goods under suspension of excise duty under Directive 92/12/EEC shall continue to apply. Movements started under the provisions of Directive 92/12/EEC shall be required to use the formalities for discharging the movement as provided for in that Directive.