Beer taxation of tomorrow - Trends in Europe

Jan LichotaUNED

Beer taxation of tomorrow

–

European trends

15TH INTERNATIONAL

BELGIAN BREWING CONFERENCE

CHAIR J. DE CLERCK XV

THE BEERS OF TOMORROW

LEUVEN, 7 SEPTEMBER 2015

Jan Lichota

Student, Political Sciences and AdministrationUniversidad Nacional de Educación a Distancia (UNED)

Academic Ichec Brussels Business Management Université de Liège International Relations; Cultural Studies Universidad Complutense Law

ProfessionalThe Brewers of Europe Polish National Tourism Office

Associative European Beer Consumers Union Polish Beer Brotherhood

Media Scandinavian Brewers Review Beer consumers & collectors magazines (Ireland, Spain) Food&Drinks press, Tourism (Poland)

Jan Lichota “Beer taxation of tomorrow” 15 Belgian Brewing Conference - The Beers of tomorrow - Leuven, 7 September 2015

Ancient Egypt

• First beertaxes

Middle Ages

• Local tax

Modern times

• Specific tax

Beer taxation: Not so long time ago …


Administrative arrangements

Administrative cooperation

Economic coordination

D+C agenda

1974

1st proposal

1987

New approachand proposal

1990

Framework proposal

1992

EU framework

1995

Evaluation

2006

AttemptMin. rate increase

2010

• Study for EC

2015

• Consultation

• Study for EC

2016

Follow-up

Technology

Market

Customs

Countries

Court rulings

Other

The excise framework in perspective


Alcoholic beverages in EU fiscal directives

Beer

• Made from malt but also includes beer mixed with non alcoholic drinks, e.g. shandy. Must exceed 0.5% alcohol by volume.

Wine

• Only wine from fresh grape (still and sparkling)

Fermented beverages other than beer and wine

• Examples include cider, fruit wines etc

Intermediate products

• All alcoholic beverages between 1.2% vol and 2.2% vol; which cannot be regarded as beer or wine. Generally fermented beverages to which ethyl alcohol has been added.

• Examples includes port, sherry etc.

Ethyl alcohol

• Pure alcohol and spirits


Beer Wine

(still/sparkling)

Other fermented

(Still/sparkling)

Intermediate

products

Ethyl alcohol

Products classified under

CN code 2203

Products containing

mixture of beer with

non-alcoholic drinks

falling within CN code

2206


CN code 2204 and 2205


CN codes 2204, 2205,

2206 with exceptions of

those classified as 1)

beer/still wine 2)

sparkling wine


CN code 2204, 2205 and

2006 which are not

classified as wine or

other fermented

beverages


CN codes 2207 and

2208, over 1,2 % abv.


CN codes 2204, 2205

and 2006, over 22 % abv.

Potable spirits containing

products, whether in

solution or not

Over 0,5 % abv. 1,2 % - 15 %

15% - 18% abv

1,2 % - 8,5 %

1,2 % - 10 %

10% - 15% abv (13)

1,2 % - 8,5 %

Between 1,2 % and 22 %

abv.

Over 1,2 % abv.

Over 22 % abv.

The European Union framework: Categories


Directive 92/83 EEC

Beer Wine

(still/sparkling)

Other fermented

(Still/sparkling)

Intermediate

products

Ethyl alcohol

Volume

+ Strength

Volume Volume Volume Volume

+ Strength

0,748 €/ hl / °Plato or

1,87 €/hl / °alc.

0 € / hl 0 € / hl 45 €/ hl 550 €/ hl at 100°Alc.

Reduced rates related to

production levels


alcohol content (≤

2.8°alc.)



8.5°alc.)



8.5°alc.)

Reduced rates for

determined products

(40%, 50%)


production levels and for

some regional products



10°alc.)

The European Union framework: Rates basis


Directives 92/83 and 92/84 EEC

Beer (EU)

• Option to use :

- ALCOHOL BY VOLUME or

- PLATO (the percentage by weight of sugar extracts contained in 100 grams of wort)

• Rate must be equal to or exceed the minimum rate at its standard level

• Must apply the same rate of duty per hectolitre

• If Plato system used, Member States may divide beer into categories consisting of no more

than 4 degrees Plato per category

• Member States may ignore fractions

• Option of reduced rates for small independent breweries, which can be lower than the

minimum rate



Europe

• Plato

• AT, BE, BG, CH, CZ, DE, ES, IT, LU, MT, PL, PT, RO

• Alcohol

• All other countries

Tax base

• Progressive beer duty on production

• AT, BE, CH, CZ, FI, LU

• Volume based reduction

• BG, DE, DK, EE, EL, FR, HU, IE, LV, NL, PL, PT, RO, SK, UK

• No reduced rates applied

• HR, CY, ES, IT, IS, LT, NO, SI, SE

Reduced rates (production)

• DK, FI, FR, HU, IE, MT, ES, UK.

Reduced rates (< 2.8 °alc.)

… and the world.


Country Base: Volume Base: Value Base: Strength Reduced Rates

(production)

Argentina

Australia

Canada

Chile

Japan

Mexico

New Zealand

Panama

South Africa

South Korea

United States

Source: OECD Tax Trends 2014, Local tax agencies

« Phone a friend »

Customs

• WCO

• EU Customs committee

Court

• ECJ

• National courts

« Elsewhere »

• EC

• The « world »


« 50:50 »

« Mixology »

• Alcohol per volume as basis

• Applicable to all alcoholic beverages categories

• Division formula

« Hybridisation »

• Alcohol per volume basis

• Use of threshold approach

« Blending »

• Plato as basis

• Strength levels applied

• Progressive beer duty

«Top up »

• Alcohol per volume as basis

• Additional duty layer

• UK > 8.5 °alc.; FR > 18°alc.


« Ask the audience »

EU Consultation

• From 28 08 2015 until 27 11 2015

• Open to business and all interested organisations and individuals

• Wish for feedback on key issues related to framework application at EU and

national level

Items

• Classification of products into corresponding category

• Market efficiency and operational administrative aspects

• Exemptions (e.g. denaturated alcohol)

• Own production/consumption


Conclusions

Key trends

• Political dimension of design → impact on management / interpretation

• Use of creativity within the system

• Arising problems for fermented beverages and intermediate products of new kind

• Potential for making more common rules among beverages’ categories

• Move towards system update and stronger links with other regulatory domains


Menu for tomorrow?


Thank youDank u wel

Vielen DankMerci

DziękujęDankon

Q&A
