EU opens consultation on lower excise rates for smaller producers

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The drinks industry in the European Union has been asked whether it wants to allow smaller beverage manufacturers to sell products at lower excise duty rates than their larger competitors.

The consultation, which runs until 27 November, notes that the EU’s excise duty directive 92/83/EEC does not allow reduced rates for small producers of wine, fortified wine, cider, RTDs and many other alcoholic beverages, although it is allowed for beer and spirits. The European Commission wants views on this and other possible changes to the directive.

Drinks companies are invited to comment on whether additional excise duty controls should be imposed on denatured industrial alcohol, which has been fraudulently used to manufacture alcoholic drinks. Introducing duty to this kind of alcohol, traditionally used to make products such as perfumes and mouthwash, could make these scams easier to detect, by creating a tax paper trail.

EU taxation Commissioner Pierre Moscovici said: "Some producers can exploit tax loopholes by producing and selling counterfeit alcohol.”

Another possible change would be the clarification of the EU’s drinks categorisation system for excise duty. In the past, regulators have been unclear what drinks should be considered ‘fermented beverages other than wine or beer’ and ‘intermediate products’ for instance, sparking court challenges over excise duty rates.

For full details of the consultation, click here.

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