EUROPEAN COMMISSION
DIRECTORATE-GENERAL
TAXATION AND CUSTOMS UNION
Indirect Taxation and Tax administration
Indirect taxes other than VAT
Brussels, 02.07.2014
CED Nr 849
taxud.c.2(2014) 2393653
Orig.: EN
WORKING PAPER
FOR INTERNAL USE
INDIRECT TAX EXPERT GROUP
(ex-WORKING GROUP N°2)
MINUTES OF THE MEETING HELD FROM 12/06/2014 TO 13/06/2014
Commission européenne, B-1049 Bruxelles / Europese Commissie, B-1049 Brussel - Belgium. Telephone: (32-2) 299 11 11
MEETING OF INDIRECT TAX EXPERT GROUP – 12 JUNE 2014
1
NEW RULES OF PROCEDURE FOR THE "WORKING GROUP 2” COMMISSION EXPERT GROUP
(CED 839) – VOTE
The COM pointed out that the share-out between the Committee on Excise Duty (CED) and
the Expert Group ‘Working Group N°2’ (in the remainder this group will change the name
and will be mentioned as the ‘Indirect Tax Expert Group’) has been done to foresee the
participation of the representatives of the European Parliament in the Expert Group meetings.
The COM further explained that the Rules of Procedure (RoP) establish the framework of
the working of the Expert Group. There is no obligation for the Expert Group to have the
RoP, therefore, the experts may change the RoP at their own discretion.
Two Member State Delegations suggested changing the name of the Expert Group. The title
‘Working Group N°2’ was replaced with ‘Indirect Tax Expert Group’.
The COM clarified that if a vote takes places during the Expert Group meeting, this vote
would only reflect the opinion of the group itself. It would not have any legal impact. The
outcome of such a vote shall be decided by a simple majority of the members. To achieve the
simple majority, 15 votes are required. Indirect Tax Expert Group and the Excise
Computerisation Working Party (ECWP) are two different groups. The Indirect Tax Expert
Group (hereinafter cited in the text as the Expert Group) is a group for legal interpretation,
whilst ECWP is a more technical group dealing with the computerized procedures. ECWP
cannot make legally binding decisions with budgetary consequences. A Member State
Delegation recommended clarifying where such decisions would be taken.
Two other Member State Delegations observed that the provisions on languages, i.e.
translations into three Commission’s working languages, were missing in the RoP for the
Expert Group.
A Member State Delegation raised a question regarding the status of existing guidelines. The
COM intends to prepare a working paper on the issue for discussion at the next meeting.
The RoP for the Expert group were adopted. Three negative opinions were received from
three Member State Delegations.
Alcohol taxation
2
RECOMMENDATIONS
PAPER ON DEVELOPING COMMON EURO-DENATURANTS FOR
PARTIALLY DENATURED ALCOHOL IN THE FIELD OF COSMETICS, PERFUMES AND PERSONAL
HYGIENE (CED 836) – CONSULTATION AND POSSIBLE VOTE
The COM presented the outcome of the Fiscalis Project Group discussions.
One Member State Delegation agreed in principle with recommendations #1 and #4, but was
not sure about the recommendation #2 regarding the manufacture of ‘fine fragrance’ and ‘in
situ’ denaturation and could not entirely agree. For recommendation #3, the Delegation could
accept it if the wording included “…or under fiscal supervision at a production site”. For
recommendation #5, this would need further research with industry, however, the Delegation
was not sure whether the industry could accept it.
Page 2 of 16
Another Member State Delegation supported the recommendations, but expressed the wish
to continue to use Diethyl phthalate as a denaturant. The representative of the European
Commission’s in-house science service – Joint Research Centre (JRC) – said that Diethyl
phthalate is not necessarily useful as a denaturant for the products that are currently
considered. The formulations would be attributed to specific products.
Four Member State Delegations notified that they allow the companies to denature alcohol
themselves at their own premises under a supervision of representatives of authorities.
Two Member State Delegations informed that in their countries the denaturation of alcohol
takes place only in a tax warehouse.
One Member State Delegation confirmed that they had already been following
recommendation #5.
One Member State opposed all Commission’s recommendations, and asked formally that the
official position of the Member State be included in the minutes of the meeting. As regards
recommendation #2, in the Member State essential oils have always and are still used to
denature a number of perfume products, but specifically in the area of "fine fragrance", with
authority given on a case by case basis. These processes in their view have a denaturing
effect, they have been accepted and therefore remain valid. Querying such denaturation
process is not acceptable to the Member State. As regards recommendation #3, the Member
State thought that it was too early to take a decision on ‘in situ’ denaturation. Nevertheless,
the Member State was quite optimistic about this provision. Regarding recommendation #5,
industry in the Member State is interested in simplifications and reduction of the number of
denaturants. However, there are limits, which cannot be overstepped: if a chemical marker is
required for all products in particular for specific products and fine fragrances, then the
Member State would not be in line with such recommendations.
One more Member State Delegation also did not support the recommendations. Two other
Member State Delegations did not support recommendation #1.
A Member State Delegation was content with the recommendations except for #4, where
they asked for clarification. The Delegation observed that registered consignees may not hold
excise products in suspension therefore references to a registered consignee in the guidelines
are confusing.
A Member State Delegation queried about the requirements to move partially denatured
alcohol between EU Member States. The COM explained that if partially denatured alcohol
is moved not in the format of a recognisable finished product, then it should be moved under
the control of Excise Movement and Control System (EMCS).
A Member State Delegation stressed that it is not reasonable to impose an obligation to
move fine fragrances (in their finished product form) under the supervision of EMCS.
Another Member State Delegation thought that only movements in bulk should be carried
out under EMCS. One more Member State Delegation argued that the recommendations are
not clear enough as regards the movement of partially denatured alcohol.
A Member State Delegation pointed out that they use refund procedures and do not apply
direct exemptions.
A Member State Delegation suggested postponing the adoption of recommendations until all
questions are answered.
Page 3 of 16
Some delegates expressed their doubts on recommendations therefore, following Article 9 of
RoP of the Expert Group that defines a written consultation, the COM decided to wait for
the meeting of FPG/013 (Project Group Partially denatured alcohol (PDA) - completion of
the work) where the topic will be further discussed and launch a written consultation on the
recommendations and a vote in writing afterwards.
3
REQUEST
BY FRANCE FOR CLARIFICATION ON THE
COMPLETELY DENATURED ALCOHOL [CDA] (CED 834)
REMOVABILITY
TESTS
FOR
The COM asked the Member State Delegations if they were in the position to suggest the
date when national denaturing methods would be abandoned.
Two Member State Delegations informed that they would notify the COM that their own
remaining national methods for complete denaturing of alcohol are about to be abandoned as
soon as possible. One Member State Delegation found it difficult to give a particular date.
The representative of the European Commission's in-house science service – Joint Research
Centre – explained that the Removability Tests of existing national denaturing methods for
Completely Denatured Alcohol are carried out for the following reasons:



To maintain the continuity of the work on the subject;
Some denaturanting formulations are less robust than others and especially than the
"Euro" CDA method. Chemical agents such as Methyl Ethyl Ketone can be easily
removed from the product (e.g. by using distillation or active carbon, etc.) and this
shows weaknesses of some of the remaining national methods;
Members of FPG/013 were interested if additional tests could be carried out mainly
focusing on the national methods that were similar to a common method.
The weaknesses of national denaturing methods are exploited by fraudsters who extract
alcohol from products exempted from excise duty, leading to considerable financial losses
for Member States.
The COM confirmed that common denaturing method is more efficient and reliable because
the denaturants combination (in the quantities used) are isopropyl alcohol (IPA; as a
chemical marker), methyl ethyl ketone (MEK; as a smelling agent) and denatonium benzoate
(as a tasting agent). IPA cannot be completely removed from the product.
4
THE
INFLUENCE OF THE TARIFF CLASSIFICATION OF AROMATISED WINE-BASED DRINKS
AND OF THE PROVISIONS OF COUNCIL REGULATION (EEC) NO 1601/91 ON THE EXCISE
TREATMENT OF SO-CALLED “PELIN” (CED 837) – QUESTION RAISED BY ONE MEMBER
STATE
A Member State Delegation thanked the COM for the working document and clear
explanations. There were no other interventions from Member States.
5
CORRESPONDENCE FROM DE ON ARTICLE 27 (1) (E) OF COUNCIL DIRECTIVE 92/83/EEC
ON THE USE OF DENATURED ALCOHOL USED IN THE PRODUCTION OF FLAVOURS FOR THE
PREPARATION OF FOODSTUFFS AND NON-ALCOHOLIC BEVERAGES WITH AN ALCOHOLIC
STRENGTH NOT EXCEEDING 1,2% VOLUME
One Member State informed that they were ready to accept the guideline regarding the Intra
Community movement of flavours (as defined in document CED 458) as of 01/09/2014.
Page 4 of 16
The COM asked those Member States that joined the EU after 2003 to express themselves in
writing and explain how their administrations treat the movements of flavours within EU.
The information received from Member State Authorities will be communicated to all
Member States.
6
NOTIFICATION BY ONE MEMBER STATE ON THE ABANDONING OF NATIONAL DENATURING
FORMULATIONS FOR COMPLETELY DENATURED ALCOHOL (CDA)
There were no comments from Member States on the Notification.
INDIRECT TAX EXPERT GROUP MEETING CONTINUATION – 13 JUNE 2014
7
REPORT ON THE FISCALIS 2013 AND CUSTOMS 2013 PROJECT GROUP ON COORDINATION
OF EXCISE AND CUSTOMS PROCEDURES (CED 838) – PRESENTATION BY THE COMMISSION
The COM presented the Report on the Fiscalis 2013 and Customs 2013 Project Group on
Coordination of Excise and Customs procedures (presentation available on CIRCABC) and
invited the Member States to submit their comments on the Final Report of Fiscalis
2013/Customs 2013 Project Group for coordination of excise and customs procedures and its
Annexes (CED 838) by 15/7/2014. The COM asked the Member State Delegations to pay a
special attention to Annex 3 (Suggestions for revision of Directive 2008/118/EC – Export
and exit of excise goods under duty suspension), Annex 5 (Level 3 BPM ‘Standard and
Simplified Customs Declaration – Release of Goods under Excise Duty Suspension’) and
Annex 6 (Level 3 BPM ‘Standard and Simplified Customs Declaration – Release of Goods
under Excise Duty Suspension – Common Data Entry Point’).
A Member State Delegation would welcome a greater harmonisation between customs and
excise sectors (as well as EMCS and AES). The Delegation stressed that the export of excise
goods should be treated slightly different from the export of other goods.
The COM informed the delegates that the work on the subject would continue in a new
Project Group under Fiscalis 2020 / Customs 2020 program. The COM will present the Final
Report of Fiscalis 2013/Customs 2013 Project Group for coordination of excise and customs
procedures during the Electronic Customs Coordination Group Meeting joint with the Trade
Contact Group (ECCG2), which will take place on 2 July 2014.
8
COMMON APPROACH FOR THE APPLICATION OF ARTICLES 10(2) AND 10(4) OF DIRECTIVE
2008/118/EC WHEN APPLIED TO IRREGULARITIES DISCOVERED IN THE MEMBER STATE OF
DESTINATION (CED 844) – CONSULTATION AND POSSIBLE VOTE
Article 10 of Council Directive 2008/118/EC
Although the application of Article 10 of the Council Directive 2008/118/EC had been
discussed several times in the previous CED meetings, the COM presented a working
document containing a new approach consisting in determining ‘taking delivery of the goods’
as a period with a prescribed end. The end of this period would be the sending of the report
of receipt.
In order to ensure a uniform application of Article 20(2) and, as a consequence, of Article
10(2) and 10(4), the COM presented a recommendation and invited Member State
Delegations to agree to it.
Page 5 of 16
A Member State Delegation had three comments on point 1, subparagraph 2 and point 2,
subparagraph 2 of the working paper prepared by the COM: i) asked to clarify how to
understand the term maximum period mentioned in the document; ii) recommended changing
the wording “movement of excise goods is not delivered”; ii) asked to make clearer the
interpretation of 4 or 5 months from the date of dispatch.
Another Member State Delegation agreed overall with the recommendation proposed by the
Commission, but mentioned that the term maximum period could be understood as maximum
journey time. It must be made clear that we refer to Article 10(4) and the 4 months period
after which the goods have not arrived. The Delegation added that there were wider issues on
Article 10(2) and Article 10(4) of the Directive 2008/118/EC, especially as regards the
definition of ‘irregularity’. This Member State delegation expressed a wish to examine the
interpretation of ‘irregularity’ more closely. The Delegation thought that Article 10(6) was
overlapping with Article 10(4) in the sense that Article 10(6) was referring to partial and
total non-delivery. One more Member State Delegation agreed with this position and also
made remarks on the explanation given by the COM regarding the partial deliveries, where
the consignee receives a reasonable explanation from the carrier or the consignor, and where
the remaining goods arrive within five working days of the initial delivery. The Delegation
wondered which movement documents would cover such partial arrivals. The same
Delegation also disagreed with the interpretation by the COM of Articles 16(2)(d) and
19(2)(b). The articles say that the movement ends first and then the goods are entered into
the accounts. The same Member State Delegation stressed that it is important to have a
common approach.
The concern about the COM’s interpretation of partial arrivals of excise goods under
suspension was repeated by several other Member State Delegations.
A Member State Delegation echoed the opinions of the delegates and agreed that a common
approach was needed – Article 10(2) of the Directive applies for shortages detected during
the movement and Article 10(4) applies where the excise goods are not delivered. The
Delegation was not happy with the definition of the end of delivery and was of the opinion
that it could be better to have an actual point of time rather than a period of time.
Yet another Member State Delegation did not agree with the definition of taking delivery
and stressed that it has to be a specific point of time. Once the arrival of goods is noted in the
register, the movement is closed. In their opinion, the Directive 2008/118/EC cannot be
interpreted so that the report of receipt defines the end of the movement. One more Member
State Delegation agreed with that point of view and emphasised that it is indispensable for
the authorities to know the status of the goods and therefore the entering of information on
the arrival of the goods into the registers must be immediate in order to ensure verification
and control possibilities for the authorities. Another Member State Delegation expressed
similar views.
This Delegation agreed with the COM proposal but added that they would like to reduce the
5 days mentioned in Article 24 between the receipt of goods and sending the report of receipt
to one day. Fraudsters can re-use the same document for several operations during the 5
days.
Two Member State Delegations pointed out that it was necessary to determine precisely
which Member State of dispatch or of destination would be responsible for claiming the
excise duties in case of irregularities.
Page 6 of 16
On the term ‘irregularity’, COM reminded the Member States that Articles 10(1), (2) and (4)
refer to irregularities in the sense of Article 10(6).
As regards the question on documentation for ‘late arrivals’, COM suggested having a
printed copy of the original accompanying document (e-AD) to go with the goods. One MS
delegation suggested issuing another e-AD.
As regards Articles 16 and 19, COM repeated what was said in the CED: these articles are
no legal base but supporting articles to the new approach given. The evidence of the end of
the movement is the sending of the report. The sequence of events should be reflected in the
revision of the Directive 2008/118/EC.
In conclusion, the COM explained that it was important to distinguish two different things: i)
the requirements at the end of the movement at national level and ii) standard Union
interpretation for the evidence of the end of a movement in relation to EMCS. In EMCS, it is
the report of receipt that is considered to be the evidence of the end of the movement. All
arrival concerned information is included in the report of receipt and disseminated to
interested Member State Administrations. As regards the claims, it is the Member State of
dispatch, which is responsible for the claims of excise duties and for the overall picture of a
movement history.
The recommendation was adopted. A majority of Member State Delegations welcomed and
supported the recommendation. Three Member State Delegations were against the
recommendation.
A Member State Delegation reminded the COM to organise a workshop on the issues of
application of Article 10 of Council Directive 2008/118/EC in the autumn of 2014.
EMCS Time Limit
The COM explained that the 4(5) months period indicated in Article 10(4) of the Council
Directive 2008/118/EC is not related to maximum journey time (Commission Regulation No
684/2009). A report of receipt, received after 4(5) months has no legal status. In the light of
EMCS functionalities, the report of receipt could be: i) rejected or ignored and then
administrative cooperation should start; ii) accepted and then the movement has to be
flagged. It is also an option to create an expired state of the movement after 3 years’ time. As
regards the journey time, it is considered to be a risk indicator important for controls. It is a
topic for discussion whether the journey time should be restricted or not.
A Member State Delegation wondered whether it would make any difference if the journey
time was reduced in legislation. It would be more important to educate economic operators
and make sure that the journey time indicated in the accompanying movement document is
reasonable, whereby ‘reasonable’ needs to be defined.
Allowable Losses
The COM explained that the shortages may only be detected under Article 10(1) (Member
State where the shortages have been detected is responsible) and Article 10(2) (Member
State of Destination is responsible) of the Council Directive 2008/118/EC. As regards
allowable losses, the following things have to be taken into consideration:


EU metrology legislation;
Evaluation of losses has to be proportionate and fair;
Page 7 of 16

Inaccuracies in the measurement tool.
A Member State Delegation inquired who has the responsibility to decide and to levy duties
– Member State of Destination or Member State of Dispatch – especially in those situations
when the two do not agree on the tolerance levels.
The COM added that all Article 10 topics could be covered by the planned workshop for the
autumn.
9
MANAGED IT COLLABORATION
COMMISSION
IN THE FIELD OF
TAXATION – PRESENTATION
BY THE
The COM presented (presentation available on CIRCABC) the activities related to IT
collaboration in the field of taxation during the last few months, in particular the
recommendations and conclusions of the Malta workshop on IT Collaboration in the field of
Taxation that took place in March 2014. Potential tangible Excise-related IT collaboration
projects could be:



EMCS evolution
o Fallback solution for traders
o Integration with Export > convergence of EMCS systems
o Automated B2B messages
Risk analysis system
Architecture reference for excise
In July 2014 a call for interest will be published to join a new Project Group on IT
collaboration.
10
EMCS TACTICAL AND STRATEGIC PLAN – PLANNING THE FUTURE OF EMCS (CED 824) –
NEXT STEPS, RELATION WITH BPMN – PRESENTATION BY THE COMMISSION
The COM presented the EMCS Tactical and Strategic Plan (presentation available on
CIRCABC) and reminded the delegates that the Strategic and Tactical Plan (CED 824) was
published in October 2013 and presented to CED on 7 November 2013. It was reviewed by
Member States from December 2013 to February 2014 Feedback from fourteen (14) MSs
was received. New version of document will be produced, taking into account comments and
will be extended to include material on Business Process Modelling and the Structure and
Content of a new IT Master Plan.
New version of strategic and tactical plan will include:




Updates to reflect comments received in earlier review;
Business Process Modelling and its contribution to meeting the objectives in the
strategic and tactical plan;
An outline of the new structure and content of the EMCS Master Plan;
Outline action plan.
Answering to the question raised by a Member State Delegation the COM informed that
Excise related BPM models will be published on ARIS Platform in autumn 2014.
Another Member State Delegation made a remark that it would be more suitable to give the
technical presentation at the ECWP meeting rather than at the Expert Group meeting.
Page 8 of 16
11
PLANNING OF UPCOMING MEETINGS AND EVENTS - PRESENTATION BY THE COMMISSION
The presentation on the Planning of upcoming meetings and events is available on
CIRCABC. There were no comments from Member State Delegations.
12
EMCS STATE OF PLAY - PRESENTATION BY THE COMMISSION
The COM presented the EMCS State of Play (presentation available on CIRCABC) and
reminded the delegates that the date of deployment of the next EMCS Phase (Ph 3.2) is set to
11/02/2016. The related scope has been published for information in March 2014 and briefly
presented at ECWP#64.
The Release Scope Document (RSD) for EMCS Phase 3.2 was published on 29/04/2014.
Member States were invited to submit their comments on the RSD by 20/06/2014.
The COM briefly presented the roadmap of Automated Testing of the National Excise
Applications and informed that interested Member State Administrations would be
contacted.
The COM informed the Delegations that Training on Business Process Modelling for all
Member State Administrations has been foreseen in November 2014.
Following the COM’s request, a Member State Delegation reported about their situation
regarding the EMCS Phase 3.1 development:



The public tendering procedure has been started;
At the end of July 2014 EMCS Phase 3.1 functionalities should be implemented;
Till that time the Member State Administration will be working with the help of
EMCS Converter.
A Member State Delegation requested to explain what date was used to count the average
response time between IE801 and IE818 messages (slide 4 of the presentation). The COM
promised to come back with an answer to this question later.
13
PROGRESS REPORT ON “AUBETTE PROJECT” – FRENCH WINES AND SPIRITS EXPORTED TO
CHINA – PRESENTATION BY ONE MEMBER STATE
The representative of one Member State National Administration gave a presentation
(available on CIRCABC) on the ‘Aubette’ project. The delegates were informed that the
project has not yet been deployed. The subject of the project is limited only to the one
Member State wines and spirits exported to China. The purpose of the project is to help to
protect the one Member State products against fraud and falsification and to improve
traceability of the one Member State products.
There were no comments from Member State Delegations.
Energy taxation
14
COMMISSION DECISION 2011/544/EU
OF 16 SEPTEMBER 2011 ESTABLISHING A COMMON
FISCAL MARKER FOR GAS OILS AND KEROSENE [NOTIFIED UNDER DOCUMENT C(2011)
6422] – REVIEW OF SOLVENT YELLOW 124
The COM gave a presentation (available on CIRCABC) concerning the Review of Solvent
Yellow 124.
Page 9 of 16
A Member State Delegation requested the COM to explain: i) the reason which triggered the
review of Solvent Yellow 124; ii) the formulation of the new common fiscal marker; iii) and
which occurrence of fraud has led to a decision to review the common marker. Similar
questions were raised by another Member State Delegation who noted that 17 Member
States prefer to keep the existing market and review it only after five more years..
One Member State Delegation explained that their joint initiative together with another
Member State to find a common fiscal marker was triggered by a vast extent of fraud in the
field of energy products. . These Member States supported also by another Member State
confirmed that there have been cases of fraud of considerable scale. There are well-known
weaknesses such as discolouration e.g.
A Member State Delegation was interested whether the information on the results of the
Questionnaire on the common fiscal marker would be included into Vade Mecum and also
wanted to know if other Member States use Euro-marker on its own or add other substances.
The COM summarised that:
15

Vade Mecum would be updated with the new information received through the
questionnaire. The COM informed that a summary of the results of the Questionnaire
will be transmitted to Member States;

It is well known that there is tax fraud in this area and COM would not like to miss
the opportunity to search for a better common fiscal marker that serves better its
objectives. At least two Member States have recently indicated that there might be a
better marker available on the market. Nevertheless, any potential common fiscal
marker would be tested by the national laboratories of Member States;

Only 12 Member States explicitly opposed the option to explore if a different marker
will provide better results. Based on the available evidence it seems justified that the
discussions for the revision of the Euro-marker continue and COM will continue to
inform and update Member States about the progress of the procedure;

The review is any case required by Commission Implementing Decision
2011/544/EU which envisages that it takes place before the end of 2016. Considering
the possibility of launching a call for expression of interest it is logical that the review
starts already in 2014 as this could be a lengthy process;

The Commission will discuss with Member States the requirements for the marker
and these could cover the effect on the dyes currently added in different Member
States to distinguish between different fuel uses.

The COM would welcome further feedback or additional information from Member
States about suitable markers or dyes or combination of the two.
REPORTING OBLIGATIONS UNDER ARTICLE 25 AND ARTICLE 26 OF DIRECTIVE 2003/96/EC
– IPM WEB BASED QUESTIONNAIRE – FOLLOW UP TO PREVIOUS DISCUSSIONS AND NEXT
STEPS
The COM invited those Member State Delegations who did not fill in the Questionnaire on
the reporting obligations under Article 25 and Article 26 of Directive 2003/96/EC to
complete it by 30 June 2014. The COM assured Member State Delegations that the
information collected with the help of the questionnaire will be used as basis for the new
Page 10 of 16
web-based procedure for collecting the information. Before launching the new procedure the
Commission Services will ensure its flawless and smooth operation.
Answering the question raised by a Member State Delegation, the COM explained that webbased questionnaires would eventually replace the current means used to submit data for
Excise Duty Tables. The new means would make the submission of data easier and together
with the additional information would help to have a better overview of the implementation
of excise legislation.
The additional information collected via the web-based questionnaire and currently not
included in the excise duty table would not be made publicly available.
16
THE SCOPE OF THE TAX EXEMPTION BASED ON ARTICLE 15.1(H) OF THE ETD – TAXATION
OF DISTRICT HEATING (CED 840)
Eight Member State Delegations agreed with the Commission Services' interpretation on the
scope of the exemption based on Article 15(1)(h) of Directive 2003/96/EC.
Three Member State Delegations did not agree with the Commission Services' interpretation
of the scope of the exemption based on Article 15(1)(h) of Directive 2003/96/EC.
The current practices in the Member States regarding the use of the exemption based on
Article 15(1)(h) of Directive 2003/96/EC are the following:





Four Member State Delegations do not apply any exemptions;
Two Member State Delegations reported that they apply exemptions on coal used for
household purposes;
Two Member State Delegations reported that they apply exemptions on gas used for
household purposes;
One Member State Delegation applies exemptions on gas and electricity used for
household purposes.
One Member State Delegation also applies exemptions on energy products used for
heating purposes for households and charities for social reasons, as well as to heat
provided by district heating for the same purposes.
Tobacco taxation
17
TAX TREATMENT OF HOMOGENIZED OR RECONSTITUTED TOBACCO OF CN CODE 2403 9100
– QUESTION RAISED BY ONE MEMBER STATE (CED 842)
The COM briefly explained that one Member State sent a letter to the COM stating that, in
their opinion, reconstituted tobacco should be treated as a product subject to excise duty. It
falls under the EMCS Excise product code T500 and Combined Nomenclature code 2403 91
00. Moreover, all conditions laid down in Directive 2011/64/EU are met.
A Member State Delegation informed that they have received information from ten Member
State Administrations about the treatment of homogenized or reconstituted tobacco: i) five
Member State Administrations agreed to tax this kind of product, ii) three other Member
State Administrations expressed doubts and would first like to examine the product more in
detail, and iii) two Member State Administrations treat it as raw tobacco (no excise duties
imposed).
Page 11 of 16
A Member State Delegation agreed with the position expressed in the letter from one
Member State and confirmed that reconstituted tobacco should be treated as an excisable
product under Article 5 of Directive 2011/64/EU.
Another Member State Delegation expressed the agreement with the Commission’s
explanation in working document CED 842.
18
MANUFACTURE OF TOBACCO PRODUCTS: CIGARETTE TUBE
QUESTION RAISED BY ONE MEMBER STATE (CED 843)
FILLERS IN RETAIL STORES
–
The Member State Delegation explained that the devices in question (cigarette tube fillers)
are smaller than the ones discussed in the Committee on Excise Duty in 2011. However,
even smaller quantities produced should be regarded as manufacturing of tobacco goods. A
Member State Delegation supported the position of one Member State expressed in their
letter and thought that it would not be enough to change the legislation in order to ban the
production of cigarettes in public places.
Two Member State Delegations pointed out that the fill-up of cigarette tubes with smoking
tobacco must be carried out only in a tax warehouse. The delegations informed that they have
laid down legal acts for this matter in their countries.
A Member State Delegation pointed out that in their country the fill-up of cigarette tubes
using a machine is also regarded as a commercial manufacturing of tobacco products and
thus, it hast to take place in a tax warehouse. Furthermore, customers pay for using such
machines and therefore, the commercial character is evident. Another Member State
Delegation agreed with this position and said that not the quantities produced, but the
commercial character is the determining point in this regard.
A Member State Delegation mentioned that in their country retail shops had installed
machines cutting tobacco into fine pieces. The authorities considered it as manufacturing
tobacco goods.
Another Member State Delegation shared the same concerns as in the letter from one
Member State, however, in their case not cigarettes, but cigars were subject to such
activities.
Five Member State Delegations agreed that such activity has to be considered as
manufacturing tobacco goods. Furthermore, one Member State Delegation supported by two
more Member State Delegations asked Member State Administrations that allow such
activities to inform all other Member States thereof.
Three Member State Delegations together with the COM agreed that one of the reasons to
ban such activity is the double taxation issue.
19
TAX TREATMENT AND POTENTIAL OTHER OBLIGATIONS CONCERNING ALTERNATIVE
SMOKING PRODUCTS, SUCH AS ELECTRONIC CIGARETTES, SHISHA, STEAM STONES ETC. –
QUESTION RAISED BY ONE MEMBER STATE
The COM confirmed that it shares the same opinion as one Member State.
A vast majority of Member State Delegations reported that they currently do not impose any
excise duties on electronic cigarettes or electronic shishas. However, some Member States
apply health regulations on such products (such as age restrictions, sales restrictions, etc.).
Page 12 of 16
One Member State Delegation informed that in their country electronic cigarettes are treated
as replacement products for tobacco cigarettes and are therefore subject to a special tax of the
same rate as for cigarettes. The authorisation for activities related to electronic cigarettes is
simplified and a control system has been introduced. The Delegation gave reference to
Article 20 (Electronic cigarettes) of Directive 2014/40/EU. There is a notification procedure
in place. The same applies to refills for e-cigarettes.
The COM informed Member State Delegations that the current tobacco taxation study
addresses the issue of electronic cigarettes and contains recommendations for taxation of
electronic cigarettes and their refills. Print-outs of the study have been distributed in the
meeting. The COM concluded that there is an agreement amongst all Member States that
such products cannot be subject to excise duties on the basis of Council Directive
2011/64/EU.
20
CLASSIFICATION AND TAX TREATMENT OF TOBACCO REFUSE WHICH CAN BE SMOKED AND
IS PRESENTED IN BULK – QUESTION RAISED BY ONE MEMBER STATE
A Member State Delegation complained that the Combined Nomenclature Explanatory
Notes (CNENs) to subheadings 2403 10 10 and 2403 10 90 as regards the tobacco refuse
which can be smoked and is presented in bulk were amended in the framework of the
Customs Code Committee. With the new wording, tobacco refuse is now regarded as
smoking tobacco, even if it is presented in bulk. The Member State was against changing the
classification of tobacco refuse due to the fact, that now there is a divergence between the
customs and excise legislation: Council Directive 2011/64/EU clearly requests that such
tobacco must be put up for retail sale; bulk consignments are not classified as smoking
tobacco. Therefore, the Member State suggested that in the future tariff changes that have an
impact on excise duty should always be discussed with the Member States in the Expert
Group or the Committee on Excise Duty beforehand in order to give them the opportunity to
express their view on any suggested amendment.
Three Member State Delegations expressed similar views regarding the Excise related
discussions and decisions at the CED or the Expert Group, not only at the Customs Code
Committee meetings. It was proposed to hold such meetings commonly.
21
TRANSPORT OF ETHYL
ONE MEMBER STATE
ALCOHOL FOR ELECTRONIC CIGARETTES
– QUESTION
RAISED BY
Two Member State Delegations agreed that liquids containing ethyl alcohol (for refills of ecigarettes) should be packaged in a tax warehouse. Moreover, such products should be
moved between Member States with an e-AD under the control of EMCS.
A Member State Delegation was wondering if it is possible to treat that product as a finished
product. The COM reacted that only certain products listed in Article 27 of Council
Directive 92/83/EEC may benefit from excise exemptions.
A Member State Delegation observed that the guidelines for the movement of flavours could
not be applied since the substances added to alcohol were not flavours.
Page 13 of 16
Appendix – Action List – Indirect Tax Expert Group
Nr
Action
for
Description
Logged on
Status
1.
DG
TAXUD
To prepare a working paper on the issue of the
status of existing guidelines for discussion at the
next meeting (as per question from BE)
Expert
Group
12/06/2014
Open
DG
TAXUD
To wait for the meeting of FPG/013 where the
movement of denatured alcohol could be
discussed and after it launch a written
consultation on recommendations and a vote in
writing
Expert
Group
12/06/2014
MSs
Those Member States that joined the EU after
2003, to express themselves in writing and
explain how their administrations treat the
movements of flavours within EU
Expert
Group
12/06/2014
4.
MSs
To submit comments on the Final Report of
Fiscalis 2013/Customs 2013 Project Group for
coordination of excise and customs procedures
and its Annexes (CED 838) by 15/7/2014
Expert
Group
13/06/2014
5.
DG
TAXUD
To organise a workshop to discuss outstanding
issues related to the application of Article 10 of
the Council Directive 2008/118/EC
Expert
Group
13/06/2014
Open
6.
DG
TAXUD
To contact interested
Member State
Administrations regarding Automated Testing of
the National Excise Applications
Expert
Group
13/06/2014
Open
7.
DG
TAXUD
To organise Training on Business Process
Modelling for all Member State Administrations
in November 2014
Expert
Group
13/06/2014
Open
8.
DG
TAXUD
To explain what date was used to count the
average response time between IE801 and IE818
messages (slide 4 of the State of play of EMCS
presentation)
Expert
Group
13/06/2014
MSs
Those Member State Delegations who did not fill
in the Questionnaire on the reporting obligations
under Article 25 and Article 26 of Directive
2003/96/EC - to complete it by 30 June 2014
Expert
Group
13/06/2014
2.
3.
9.
Page 14 of 16
Open
Open
Open
Open
Open
ITEG meeting 12. – 13.06.2014
Attendance list
Member State
Ministry/Organisation
Belgium
Ministry of Finance
Bulgaria
National Customs Agency
Czech Republic
General Directorate of Customs
Ministry of Finance
Denmark
Ministry of Tax
Germany
Ministry of Finance
Estonia
Ministry of Finance
Latvia
State Revenue Service and
Ministry of Finance
Cyprus
Ministry of Finance
Italy
Agencia Dogane e Monopoli, Ministero Finanze, Comando
Generale Guardia di Finanza
Ireland
Irish Tax and Customs
France
Douane
Spain
Agencia Estatal de Administración Tributaria
Ministerio de Hacienda y Administraciones Públicas
Lithuania
Ministry of Finance
Luxembourg
Direction Des Douanes et Accises
Hungary
Ministry for National Economy
Malta
Excise and Customs Department
Page 15 of 16
The Netherlands
Ministry of Finance
Austria
Ministry of Finance
Poland
Ministry of Finance
Portugal
Customs and Excise Administration
Romania
General Directorate of Fiscal Code, Ministry of Public
Finance
Goods Movement Office, General Customs Directorate
Slovakia
Ministry of Finance
Slovenia
Customs Administration
Finland
Ministry of Finance
Sweden
Ministry of Finance
United Kingdom
HM Revenue and Customs
Croatia
Ministry of Finance
Page 16 of 16