The procedure for collecting excise duty in the European Union has its own characteristics and rules. To successfully conduct business in EU countries, you need to thoroughly know Europe’s fiscal policy, as well as all the intricacies of excise taxation. From this guide, you will learn what excisable goods are, which groups of goods are subject to excise taxes in the European Union, and the features of trade and payment of excise.

Excisable goods: what is it

Excisable goods are certain categories of products that are subject to excise tax. This includes trade within countries, as well as imported products. An excise tax is paid by an entrepreneur or an organization that sells or produces excisable goods.

Excise taxes are one of the types of indirect tax, which are subject only to specific groups of goods. This includes products that adversely affect human health or the environment in one way or another. The reason for the tax is to reduce the number of purchases of goods and their use by increasing the cost.

Which goods are subject to excise duty in the EU?

As mentioned above, the objects of taxation include goods that are harmful to humans and the environment (exhaust emissions, waste, etc.). Separately, the following groups can be distinguished, payable:

• Alcohol;
• Coffee and tobacco products;
• Electrical energy and energy products;
• Oil and fuel.

The list of excisable goods includes all products that were created in the EU countries or came to Europe by import from other countries.

Excise duty goods in the EU (food and drinks)

Alcoholic beverages are subject to higher taxes due to their potential health risks and societal costs. The EU imposes excise duties on various types of alcoholic beverages, including beer, wine, and spirits. The tax rates can vary depending on the specific product and its alcohol content.

Excise duty rates on food products are generally not as prevalent in the EU. However, certain specific food products may be subject to excise duty in certain countries, especially if they are deemed harmful or require additional regulation. For example, sugary beverages or products with high levels of unhealthy additives might face additional taxes in some EU member states to discourage excessive consumption and promote healthier choices.

Excise duty goods in the EU (Fossil Fuels)

Excise duty on fossil fuels within the European Union plays a crucial role in environmental and energy policies. Fossil fuels, including oil, gasoline, diesel, and coal, are subject to such duty due to their adverse environmental impact, contribution to greenhouse gas emissions, and the EU’s commitment to promoting cleaner and more sustainable energy sources.

The EU has implemented varying excise duty rates on fossil fuels to discourage their consumption and encourage the transition to renewable energy alternatives. These taxes are applied at different stages of the supply chain, including production, importation, and distribution. While individual EU member states can have different excise duty rates, there are minimum rates set by EU directives to ensure a level of harmonization.

The specific rates of excise duty on fossil fuels depend on factors such as the type of fuel, its energy content, and its intended use. For instance, gasoline used for transportation generally attracts higher excise duty rates compared to heating oil used for residential or commercial purposes. These rates are designed to align with the EU’s goals of reducing carbon emissions, combatting climate change, and fostering a more sustainable energy landscape.

Excise duty goods in the EU (Tobacco)

Excise duty on tobacco products in the European Union is a vital component of public health and fiscal policies. Tobacco products, such as cigarettes and cigars, are subject to excise duty due to their well-documented adverse health effects and the EU’s commitment to reducing tobacco consumption.

The excise duty rates on tobacco products are typically based on factors such as the type of product, its weight or quantity, and the presence of any additional flavors or additives. Cigarettes, for example, generally attract higher excise duty rates compared to other tobacco products. The rates may be adjusted periodically to account for inflation and changes in public health priorities.

Excise duty goods in the EU (other)

Excise duty is also imposed on a variety of other goods in the European Union, in addition to tobacco and fossil fuels. These goods include packaging materials, waste products, precious metals, mobile telephony services, all types of cement, pneumatic tires, toiletries and washing preparations, construction components, and other fixtures.

• Packaging: Certain types of packaging materials that have environmental implications or contribute to waste generation may be subject to excise duty.
• Waste: Excise duty can be imposed on waste products, such as landfill waste or specific categories of hazardous waste, in some EU countries.
• Precious metals: Precious metals like gold, silver, and platinum may be subject to excise duty within the EU, with specific regulations and rates varying among member states.
• Mobile telephony services: Excise duty may be applicable to mobile telephony services, including charges on voice calls, text messages, data usage, and other telecommunications services.
• Toiletries and washing preparations: Certain toiletries and washing preparations, such as cosmetics, perfumes, and specific cleaning products, may be subject to excise duty in certain EU countries.

Features of trading in excisable goods

If you plan to trade in excisable goods, you need to take into account that the payment of excise will be carried out based on the standards established by the EU country where the sale is planned. This applies to both physical and remote trading. Minimum tax rates are standard, with each EU member free to regulate the law, increasing the cost.

Each seller of excisable goods must have a license and their own excise number in the SEED database. This is a register of sellers, which is maintained separately by each EU country to record and define taxpayers. An excise registration number is an identification number assigned to a private entrepreneur or organization.

When and who pays for excises

There is a big difference between the moment of imposition of excise tax and the moment of its payment. Most of these goods are subject to excise immediately upon arrival in Europe, but the duty does not always need to be paid immediately. In most cases, the excise tax is paid during the buying of goods.

Unforeseen circumstances – emergencies and elements are also taken into account. If for such a reason the goods are lost or destroyed, custom duty and excise duty are not paid.

Several people can be excise payers – it all depends on the end user. This may be a business or a private entrepreneur who is responsible for the production, storage, and movement of products. Also, the payer can be the sender of the goods, its recipient, the carrier company, and even a third party who is the guarantor.