European Union attacks Colombia over imported spirits tax rate
Colombia levies a lower tax rate on spirits with an abv of 35% and below
The European Union (EU) has called on the World Trade Organisation (WTO) to establish a disputes panel to consider its claim that Colombia is breaking global trade rules over the country's alleged "discriminatory treatment" of imported spirits.
Colombia taxes spirits with an abv above 35% at COP487 (US$0.17) per degree. This compares to a tax rate of COP297 per abv degree on spirits of 35% abv or lower.
Domestically-made spirits usually contain less than 35% abv. Anise-flavoured Aguardiente, for example, is typically 30% abv. Subsequently, most imported products (such as Bourbon or Scotch whisky) are taxed at a higher level than local spirits.
Some local Colombian authorities, meanwhile, can impose limits on the amount of imported spirits in their jurisdictions, and have the power to impose minimum selling prices. These actions break the WTO's general agreement on tariffs and trade (GATT), argues the EU.
In 2014, the EU exported EUR43m (US$82.4m) of spirits to Colombia.
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