An introduction to the categories of excise goods and the methods by which trade in these goods can take place are contained in this case.
Intra-community Movement of Excisable Goods General
Categories of excise goods:
- Alcohol (Beer, Wine, Spirits, etc.)
- Hydrocarbon Oils (Diesel, Petrol, etc.)
- Tobacco Products (Cigarettes, Cigars, etc.)
Since 1 January 1993 there are rules, common to each Member State (MS) of the European Union (EU), governing the movement of these goods.
There are basically 4 channels or methods by which movement/trade can take place and these are described in the following paragraphs.
Method 1: Tax Warehouse
This is the main channel of movement for commercial consignments. The goods travel without payment of duty (duty suspended) between a tax warehouse in one MS and a tax warehouse in another MS.
The tax warehouses must be authorised and the tax warehouse of dispatch must provide security for the duty until the movement has been completed. This security is a guarantee against the potential loss of duty, which would arise if the goods went missing. The movement is basically completed when the tax warehouse of dispatch gets a receipt for the goods.
The documentation covering the movement is a five-part document known as the Administrative Accompanying Document (AAD) and is used for all duty suspended dispatches to another MS as follows:
- Copy 1: Consignor?s copy;
- Copy 2: Consignee?s copy;
- Copy 3: Receipt copy;
- Copy 4/Copy 5: Administrative Purposes;
N.B. Copies 2, 3 and 4 must travel with the goods. Duty will be paid by the tax warehouse of receipt when the goods are eventually delivered for consumption in that
Method 2: Registered Trader
If not approved to have a tax warehouse a person may become a registered trader and import (but not export) excise goods from a tax warehouse in another MS. The goods will travel duty suspended with an AAD but duty must be paid immediately on receipt of the goods.
A registered trader cannot acquire goods, on a duty suspended basis, from a tax warehouse in the MS where he/she is based. Also, application for registration will only be considered from someone who is a ?taxable person? under the VAT Act.
Method 3: Unregistered Traders
Where a trader does not have the volume of business to justify being registered he/she may none-the-less import excise goods from a tax warehouse in another MS. As is the case with a registered trader the goods may travel duty suspended with an AAD but there will be two main differences:
- advance written notice of intention to obtain the goods must be given (to customs in the MS of receipt).
- duty must be paid or guaranteed in advance by means of the Duty Guarantee Document, which must be presented to the tax warehouse of dispatch and travel with the goods. Duty is due immediately upon arrival.
Method 4: Duty-Paid Movement
There is provision for intra-Community trade in duty-paid goods. In other words they are not dispatched from a tax warehouse on a duty suspended basis. In these cases the procedure is similar to that in the case of unregistered traders. However, instead of the
AAD (which is used only by a tax warehouse) the Simplified Accompanying Document is used and Copy 3 (receipt copy) will be needed to reclaim the duty paid in the MS of dispatch when the movement has been completed.
A distinction has to be made between commercial traffic and transport of goods by private people.
?For commercial traffic, the principle of taxation in the Member State of destination applies. Therefore, products which have already been released for consumption and which are transported to another Member State will be subject to excise duty in the Member State of destination. To avoid double taxation, Directive 92/12/EEC provides for a system of reimbursement of the excise duty paid in the first Member State , subject to conditions to be determined by that Member State .
?For excise products purchased by private travellers for their own use and transported by themselves from one Member State to another, the principle of taxation in the Member State of origin applies. This means that excise duty will only be due in the Member State of purchase and that no further excise duty applies in any other Member State to which the products are transported. More information is available on the page "travellers".
The above is a general outline of the procedures involved in the commercial movement of excise goods within the EU. Further details can be obtained from any local customs and excise office.