Taxation, customs union and anti-fraud

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General arrangements for excise duty

Overall state of play:

Evaluation finalised; 21.04.2017 – COM(2018) 184 and SWD(2017)131
Commission proposal adopted on 25.05. 2018; COM(2018)349.
Legal acts adopted:
1. Council Regulation (EU) 2020/261 of 19 December 2019 amending Regulation (EU) No 389/2012 on administrative cooperation in the field of excise duties as regards the content of electronic registers
2. Council Directive (EU) 2020/262 of 19 December 2019 laying down the general arrangements for excise duty (recast)
3. Decision (EU) 2020/263 of the European Parliament and of the Council of 15 January 2020 on computerising the movement and surveillance of excise goods (recast)

State of play, main conclusions, outlook

The Commission proposed a revision of the Directive 2008/118/EC to align and ensure coherence between customs and excise legislation, and the automation of duty paid business to business (B2B) procedures, to improve legal certainty and ensure the uniform application of EU legislation.

Estimated savings and benefits

The automation of the connection between excise and customs procedures is expected to reduce administrative burden for Member States and bring comparable reductions in compliance costs currently experienced by economic operators. It would provide legal certainty and uniform application of EU customs and excise law, which would eventually lead to facilitation of trade in the EU while securing payment of excise duties. Preferred options have a positive economic return with a payback time of a couple of years and/or help reduce fraud. The yearly benefits for Member States and economic operators are estimated by the impact assessment at EUR 14.55 and 32.27 million, respectively.

State of Play:

Finalised, 21.04.2017 – COM(2018) 184 and SWD(2017)131.

Scope:

Evaluation of Directive 2008/118/EC on the general arrangements for excise duty

Evaluation findings:

The evaluation has shown that:

– The legal and technical arrangements for coordination of customs and excise procedures do not work well, causing legal uncertainty, delays and providing opportunities for fraud.

– The arrangements for moving excise goods outside of duty suspension (tax deferral), which should be of particular interest for small and medium enterprises, are out of date, unclear and burdensome.

- The legal and technical base for handling irregularities during excise movements and for accounting for excise duty correctly in these situations is incomplete.

– The information provided by electronic systems is insufficient to allow Member States to conduct Risk Analysis, leading to excessive control activities or to potential fraud, or both

– The information provided by electronic systems is insufficient to allow Member States to conduct Risk Analysis, leading to excessive control activities or to potential fraud

Estimated savings and benefits

The evaluation showed that the automation of the previously paper-based procedures for movements of excise goods under duty suspension saved Member States the equivalent of 720 full time staff per year i.e. EUR 32 million¹ per year.

1 Assuming an EU average cost of 25€ per hour and per full time staff

State of Play:

Adopted: COM(2018)349; adopted on 25.05.2018

Which objective(s) did the Commission pursue?

The proposal aimed at reducing administrative burden and costs for economic operators and Member States by further harmonising and simplifying excise legislation.

It also aimed at ensuring the proper functioning of the internal market (Article 113 of the TFEU) and to safeguard the revenue of Member States. More specifically, the initiative aimed also at ensuring the equal treatment of economic operators and strengthening the fight against fraud and tax evasion, while ensuring a high level of public health protection.

Estimated savings and benefits

Preferred options have a positive economic return with a payback time of a couple of years and/or help reduce fraud. The yearly benefits for Member States and economic operators are estimated by the impact assessment at EUR 14.55¹ and 32.27² million respectively.

1 This figure does not include the benefits on fraud reduction, which could not be quantified due to the scarcity of available data

2 This figure is lower bonds as some preferred options (Allowable losses thresholds, Right to be Heard) bring benefits that could not be quantified due to lack of available data

State of Play:

Adopted on 19.12. 2019 and 15.01.2020:
1. Council Regulation (EU) 2020/261 of 19 December 2019 amending Regulation (EU) No 389/2012 on administrative cooperation in the field of excise duties as regards the content of electronic registers
2. Council Directive (EU) 2020/262 of 19 December 2019 laying down the general arrangements for excise duty (recast)
3. Decision (EU) 2020/263 of the European Parliament and of the Council of 15 January 2020 on computerising the movement and surveillance of excise goods (recast)

Outcome of Legislative Procedure

There were no substantial amendments to the initial Commission proposals.

Estimated savings and benefits

No updated estimate of savings and benefits is available. Directive (EU) 2020/262 is not in full effect until February 2024. The same is the case for the matching amending Regulation, Regulation (EU) 2020/261. Decision (EU) 2020/263 expands the scope of legal governance arrangements and does not have any economic effect separable form that of the other two acts.

State of Play:

The Commission has adopted or is preparing a number of acts:

– In order to introduce a 2-letter code to distinguish the economic operators of Northern Ireland following Brexit: Commission Implementing Regulation (EU) 2020/1811 of 1 December 2020 amending Regulation (EC) No 684/2009 as regards the identification of economic operators in Northern Ireland

– In order for the eAD and SAD to be used for the movements of excise goods by the certified and self-certified independent small producers:

• Commission Implementing Regulation (EU) 2021/2265 of 17 December 2021 amending Regulation (EC) No 684/2009 as regards the identification of certified and self-certified independent small producers of alcoholic beverages in the electronic administrative document
• Commission Implementing Regulation (EU) 2021/2264 of 17 December 2021 amending Regulation (EEC) No 3649/92 as regards the explanatory notes of the simplified accompanying document for certified and self-certified independent small producers of alcoholic beverages

– In order to align with Directive 2008/118/EC amended by Council Directive (EU) 2019/2235 (2), which introduced exemptions from payment of VAT and excise duty for defence efforts undertaken within the Union framework: Commission Implementing Regulation (EU) 2022/829 of 25 May 2022 amending Regulation (EC) No 31/96 as regards the institutions eligible for exemption from excise duty

– Stemming from Directive (EU) 2020/262 and consequently applicable on 13/02/2023:

• Commission Delegated Regulation (EU) 2022/1636 of 5 July 2022 supplementing Council Directive (EU) 2020/262 by establishing the structure and content of the documents exchanged in the context of movement of excise goods, and establishing a threshold for the losses due to the nature of the goods
• Commission Implementing Regulation (EU) 2022/1637 of 5 July 2022 laying down the rules for the application of Council Directive (EU) 2020/262 as regards the use of documents in the context of movement of excise goods under a duty suspension arrangement and of movement of excise goods after release for consumption, and establishing the form to be used for the exemption certificate

– To allow the automation of duty paid business to business (B2B) procedures, to improve legal certainty and ensure the uniform application of EU legislation:

• Adopted - Council Regulation (EU) 2021/774 of 10 May 2021 amending Regulation (EU) No 389/2012 on administrative cooperation in the field of excise duties as regards the content of electronic registers
• Pending

o Council Regulation (EU) 2022/.XXX of XXX amending Regulation (EU) No 389/2012 on administrative cooperation in the field of excise duties as regards the exchange of information maintained in the electronic registers concerning economic operators who move excise goods between Member States for commercial purposes
o Commission Implementing Regulation (EU) 2022/.XXX of XXX amending Commission Implementing Regulation (EU) No 612/2013 as regards the data registered in messages relating to the registration of economic operators involved in the movements of excise goods released for consumption in one Member State and moved to another Member State to be delivered there for commercial purposes
o Commission Implementing Regulation (EU) 2022/.XXX of XXX amending Commission Implementing Regulation (EU) No 2016/323 amending Implementing Regulation (EU) 2016/323 as regards the messages relating to the movements of excise goods under duty suspension pursuant to Council Regulation (EU) No 389/2012