Across the European Union, alcohol transit is subject to declaration. When importing or exporting products, or when routing them through EU countries, alcoholic beverage merchants must inform the government by making a customs declaration. Shipped alcohol is then assigned a number which is registered to indicate the quantity transported. Once received, distributors declare that they have received bottles at their sales location so that taxes can be deducted. How exactly are taxes applied to alcohol? And more importantly, what payment methods are there for a digital customs declaration? In this article, we take a closer look at the regulation governing circulation of alcoholic beverages in the European Union.
Taxation of alcoholic beverages in the European Union
Excise duties for alcoholic beverages in the EU
Alcohol is subject to taxation the same way as tobacco and energy products, and any alcoholic beverages intended for circulation within the European Union must first be declared to the authorities. Taxes paid by the distributor are known as excise duties and can be recovered through payment of the consumer sale price.
A bottle’s tax payment is indicated by an official seal known as a CRD. This seal is green for still wines, and its color varies with other types of alcohol.
Scope of application and excise duty rate
Excise duties apply to alcoholic beverages transiting within EU countries or those which are imported into or exported from the European Union. Taxation occurs in the member state where the drink is consumed. It is worth noting that amounts are proportional to a beverage’s alcoholic content, according to a pure alcohol rate per hectoliter set by each member state.
Excise recovery procedure
To prevent distributors from prepaying the tax amount which will itself be subject to VAT, the payment of excise duties is made as far along as possible on the distribution chain. Excise duties are paid for at the time the product is placed on sale for the end consumer.
In return, the European Union requires strict tax control for wine, beer, and any other alcoholic beverages subject to excise duties, from when beverages are produced in the EU to when the final sale has been made. Excise duties involve not only alcohol producers, but also logistics partners, traders, and resellers.
EMCS / GAMM@, or computerized tracking for products subject to excise duties
The European EMCS project
Since January 1, 2011, any intra-EU product movement under suspension of excise duty must be covered by an electronic administrative document (e-AD). The European EMCS project (Excise Movement and Control System) enabled the accompanying administrative document (AAD), formerly a paper document, to be digitized.
The goal of this tax procedure digitization is two-fold:
The EMCS program ensures traceability of alcoholic beverages in the European Union subject to excise duties, from when e-ADs are issued to when they are received. Alcohol movement tracking now takes place in real-time in a totally secure environment, a major change from paper documents, which imposed their own requirements for processing and conservation.
The online GAMM@ procedure
In anticipation of the EMCS project’s requirements, the French customs authorities launched their own online procedure on April 1, 2009 to digitize excise duties. The procedure was known as GAMM@, a French acronym short for “Managed assistance for moving merchandise subject to excise duties.” The system allowed for the printing of simplified accompanying documents (AADs) necessary to intra-EU or national circulation of alcoholic beverage in the European Union, with suspended or paid duties.
Roll-out of e-AD in France
Since July 1, 2017, movement throughout Europe of alcohol subject to suspended excise duties must be declared using an electronic administrative document (e-AD), similar to intra-EU circulation products. In this way, the GAMM@ online procedure allows e-ADs to be consulted by customs officials or operators involved in the process. That includes e-ADs issued and received for intra-EU or single country circulation, whether with suspended or paid excise duties.
How e-ADs are completed
Operators have two ways to fill out e-ADs:
From the moment products are delivered, the recipient must confirm receipt of the e-AD to audit the movement of merchandise.
EMCS-GAMM@ access points
Three GAMM@ technical access procedures are available according to the technique selected by the operator:
Operators can use one or several of the GAMM@ online procedures jointly. It is also possible to use EDI mode to automatically import e-ADs, before using DTI mode to issue delivery receipts. Nonetheless, a transaction begun using one of the aforementioned procedures must continue until that method’s procedure is completed.
Securing a data transmission system
In EDI mode, the transmission of messages in XML format occurs via a secure access point using electronic signature. The MAREVA secure e-mail protocol is used for exchange between a company’s declaration solution and the administration’s ProDouane service. Declarers must use a solution certified by customs authorities.
With DTI and DTI+ mode, system access goes through the online customs procedure portal ProDouane. Operators must be authorized to use the portal they access with their username and password. For confidentiality reasons, operators may only access data that concerns them individually, both as senders and receivers.
Digitization of excise duties for alcoholic beverages in the European Union shows how governments have advanced in the digitization and simplification of administrative and fiscal procedures. Combined with the launch of GAMM@ online procedures in France, the European EMCS project has redirected procedures to a computerized system that is easy for all operators to use. The same process applies to all declarative procedures, whatever their field (tax forms, VAT, invoices, social security declarations, etc.)
Each step of the way, governments offer several declaration methods—EDI, portal entry, deposit—that adapt to the volume exchanged and desire to automate declarations. EDI should be preferred when data exchange volumes are great in order to maximize productivity and traceability and to prevent data entry or platform use errors.
Do you want to learn more about the exchange of computer data and its applications to tax procedures when dealing with alcoholic beverage excise duties? Learn more about the Generix Customs Services offering, which holds dual customs certification (GAMV3-2012-00/08 software and service).
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