General arrangements for excise duty applied to tobacco and tobacco related products

PURPOSE: to amend Directive (EU) 2020/262 as regards the general arrangements for excise duty in respect of tobacco and tobacco related products.

PROPOSED ACT: Council Directive.

ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion.

BACKGROUND: Council Directive (EU) 2020/262 sets out general arrangements for goods subject to excise duty, with particular emphasis on the production, storage and movement of excise goods between Member States.

Directive 2011/64/EU, which establishes the structure and rates of excise duty applied to manufactured tobacco, is to be replaced by Council Directive 2011/64/EU on the structure and rates of excise duty applied to tobacco and related tobacco products, adopted on the same day as this Directive, with effect from 1 January 2028.

The Council Directive on the structure and rates of excise duty applied to tobacco and related tobacco products covers a number of new products functioning as substitutes for manufactured tobacco, containing tobacco or nicotine, and raw tobacco. Therefore, the list of excise goods to which Directive (EU) 2020/262 applies should also cover all of these products.

CONTENT: to ensure the detection of irregularities and potential diversions, supply-chain operations for raw tobacco should be subject to the control and movement requirements of Council Directive (EU) 2020/262.

Given the burden it would represent for small growers and the limited risk of fraud, Member States should exempt tobacco growers, their organisations and associations from the control and movement requirements, provided they are not involved in the transformation of cured or dried tobacco into processed tobacco.