Europaudvalget 2018
KOM (2018) 0346
Offentligt
1900876_0001.png
EUROPEAN
COMMISSION
Brussels, 25.5.2018
SWD(2018) 260 final
COMMISSION STAFF WORKING DOCUMENT
IMPACT ASSESSMENT
Accompanying the document
Proposal for a Council Directive
laying down the general arrangements for excise duty (recast)
{COM(2018) 346 final} - {SEC(2018) 255 final} - {SWD(2018) 261 final}
EN
EN
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Table of Contents
1.
INTRODUCTION AND CONTEXT ......................................................................... 5
1.1.
1.2.
1.3.
1.4.
1.5.
1.6.
1.7.
2.
Excise duty, excise goods and fiscal risk .......................................................... 5
Purpose of Directive 2008/118/EC ................................................................... 5
Evaluation of Directive 2008/118/EC ............................................................... 6
Intervention Logic ............................................................................................. 6
Trans-European IT systems supporting the excise policy ................................. 7
Volume of excise trade and fraud...................................................................... 7
Sources .............................................................................................................. 8
WHAT IS THE PROBLEM AND WHY IS IT A PROBLEM .................................. 9
2.1. Scope of this initiative ....................................................................................... 9
2.2. Excise
–
Customs interactions: Export ............................................................ 10
2.2.1. Overview of the current situation ...................................................... 10
2.2.2. Problem Analysis .............................................................................. 11
2.3. Excise
–
Customs interactions: Export followed by Transit or using a
Single Transport Contract (hereafter: STC) .................................................... 13
2.3.1. Overview of the current situation ...................................................... 13
2.3.2. Problem Analysis .............................................................................. 14
2.4. Excise
–
Customs interactions: Import ............................................................ 17
2.4.1. Overview of the current situation ...................................................... 17
2.4.2. Problem Analysis .............................................................................. 17
2.5. Duty Paid Business-to-Business (B2B)........................................................... 19
2.5.1. Overview of the current situation ...................................................... 19
2.5.2. Problem Analysis .............................................................................. 19
2.6. Low Risk Movements ..................................................................................... 21
2.7. Exceptional Situations ..................................................................................... 23
2.7.1. Overview of the current situation ...................................................... 23
2.7.2. Problem Analysis .............................................................................. 23
3.
4.
WHY SHOULD THE EU ACT ................................................................................ 25
WHAT SHOULD BE ACHIEVED .......................................................................... 27
4.1.
4.2.
4.3.
4.4.
4.5.
General objectives ........................................................................................... 27
Specific objectives........................................................................................... 27
Linking the objectives to the problems ........................................................... 28
Assessment criteria .......................................................................................... 28
Consistency with other EU policies and with the Charter for fundamental
rights ................................................................................................................ 29
5.
WHAT ARE THE VARIOUS OPTIONS TO ACHIEVE THE OBJECTIVES ...... 30
5.1. Excise
–
Customs interactions: Export ............................................................ 30
5.1.1. Option 1: Do nothing (baseline) ........................................................ 30
5.1.2. Option 2: Data cross-check ............................................................... 30
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5.2.
5.3.
5.4.
5.5.
5.1.3. Option 3: Automated process synchronisation .................................. 31
5.1.4. Option 4: EU common list of Alternate Proofs of Exit ..................... 31
Excise
–
Customs interactions: Export followed by Transit or using STC ..... 31
5.2.1. Option 1: Do nothing (baseline) ........................................................ 31
5.2.2. Option 2: Authorise the use of external transit after the export
procedure for excise Union goods ..................................................... 31
Excise
–
Customs interactions: Import ............................................................ 32
5.3.1. Option 1: Do nothing (baseline) ........................................................ 33
5.3.2. Option 2: Data cross-check ............................................................... 33
Duty Paid Business-to-Business...................................................................... 34
5.4.1. Option 1: Do nothing (baseline) ........................................................ 34
5.4.2. Option 2: Registration of Economic Operators ................................. 34
5.4.3. Option 3: Automation of Duty Paid B2B processes by extending
EMCS ................................................................................................ 34
Exceptional Situations ..................................................................................... 35
5.5.1. Option 1: Do nothing (baseline) ........................................................ 35
5.5.2. Option 2: Specify a common approach supported by legislation
and guidelines .................................................................................... 35
6.
WHAT ARE THE IMPACTS OF THE DIFFERENT POLICY OPTIONS ............ 37
6.1. Excise
–
Customs interactions: Export ............................................................ 37
6.1.1. Do nothing (baseline) ........................................................................ 37
6.1.2. Data cross-check................................................................................ 37
6.1.3. Automated process synchronisation .................................................. 38
6.1.4. EU common list of Alternate Proofs of Exit ..................................... 38
6.2. Excise
–
Customs interactions: Export followed by Transit or using STC ..... 39
6.2.1. Do nothing (baseline) ........................................................................ 39
6.2.2. Authorise the use of external transit after the export procedure for
excise Union goods ........................................................................... 39
6.3. Excise
–
Customs interactions: Import ............................................................ 41
6.3.1. Do nothing (baseline) ........................................................................ 41
6.3.2. Data cross-check................................................................................ 41
6.4. Duty Paid Business-to-Business...................................................................... 42
6.4.1. Do nothing (baseline) ........................................................................ 42
6.4.2. Registration of Economic Operators ................................................. 42
6.4.3. Automation of Duty Paid B2B processes by extending EMCS ........ 43
6.5. Exceptional Situations ..................................................................................... 44
6.5.1. Do nothing (baseline) ........................................................................ 44
6.5.2. Specify a common approach supported by legislation and
guidelines........................................................................................... 44
7.
HOW DO THE OPTIONS COMPARE.................................................................... 47
7.1. Excise
–
Customs interactions: Export ............................................................ 48
7.2. Excise
–
Customs interactions: Export followed by Transit or using STC ..... 49
7.3. Excise
–
Customs interactions: Import ............................................................ 50
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7.4. Duty Paid Business-to-Business...................................................................... 51
7.5. Exceptional Situations ..................................................................................... 52
8.
THE PREFERRED OPTION .................................................................................... 54
8.1.
8.2.
8.3.
8.4.
8.5.
8.6.
9.
Excise
–
Customs interactions: Export ............................................................ 54
Excise
–
Customs interactions: Export followed by Transit or using STC ..... 54
Excise
–
Customs interactions: Import ............................................................ 54
Duty Paid Business-to-Business...................................................................... 55
Exceptional Situations ..................................................................................... 55
REFIT (simplification and improved efficiency) ............................................ 56
HOW WOULD ACTUAL IMPACTS BE MONITORED AND EVALUATED .... 57
9.1. Monitoring Indicators ...................................................................................... 58
9.2. Monitoring structures ...................................................................................... 59
9.3. Evaluation........................................................................................................ 59
ANNEXES ........................................................................................................................ 60
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ABBREVIATIONS
AES
Aka
APoE
ARC
B2B
CAPEX
CCN/CSI
e-AD
ECS
EMCS
EO
EOS
FAD
G€
IA
ISSG
IT
k€
M€
MS
n/a
NA
NCTS
NGO
OPC
OPEX
REFIT
SAAD
SEED
SME
STC
UCC
UCC/IA
VAT
VIES
Automated Export System (future UCC system, successor of ECS)
also known as
Alternate Proof of Exit
Administrative Reference Code (identifier of an e-AD)
Business to Business
Capital Expenditure
Common Communication Network / Common System Interface
electronic Administrative Document
(excise "declaration" for moving goods under duty suspension)
Export Control System
Excise Movement Control System
Economic Operator
Economic Operator System
Fallback Administrative Document
(replaces an e-AD in the rare occurrence when the EMCS system is down)
billion euros (giga euro)
Impact Assessment
Inter-Service Steering Group
Information Technology
thousand euros (kilo euro)
million euros
Member State
not applicable
National Authority
New Computerised Transit System
Non Governmental Organisation
Open Public Consultation
Operating Expenses
Regulatory Fitness and Performance programme
Simplified Administrative Accompanying Document
(excise "declaration" for moving goods under duty paid business-to-business)
System for Exchange of Excise Data
(EU repository of authorised Excise traders)
Small and Medium Enterprises
Single Transport Contract
Union Customs Code
Union Customs Code Implementing Act
Value-Added Tax
VAT Information Exchange System
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1.
1.1.
I
NTRODUCTION AND
C
ONTEXT
Excise duty, excise goods and fiscal risk
Excise duty is an indirect tax applied to certain types of goods (aka "excise goods"), which is
collected at the time and place of release for consumption
1
.
Some goods are subject to harmonised excise duty in the European Union, i.e. common EU
legislation applies to certain products which are subject to excise duty in all EU Member
States: alcohol and alcoholic beverages, manufactured tobacco, energy products and
electricity. This harmonisation includes the way excise goods are held and moved in the EU
but still allows large differences in duty rates between Member States.
The movement of excise goods has a high inherent fiscal risk for the following reasons:
1. The duty rates of some excise products (e.g. cigarettes, some energy products) lead to a
taxation burden that is much greater than the net value of the goods.
2. The duty rates vary greatly from one Member State to another
2
, which acts as a strong
incentive to fraudsters to divert excise goods from low-rate Member States to the illicit
markets of high-rate Member States.
3. The total amount of excise duty due on a set of excise goods is collected from one tax
payer at a single time and location, which makes excise duty more vulnerable to fraud than
other types of indirect taxes
3
.
4. Excise duty is in almost all circumstances due in the Member State of consumption (the
destination principle), but excise goods are often produced or imported elsewhere, giving
rise to the need for specific procedures to defer the payment of tax, or cumbersome tax
refund arrangements.
1.2.
Purpose of Directive 2008/118/EC
After the establishment of the internal market and the abolition of border controls for fiscal
purposes between Member States, provisions were made for excise goods to be moved
without first
being taxed in the Member State of dispatch (i.e. excise duty is ‘suspended’) and
to ensure the possibility of the free movement of excise goods.
To allow the free movement of goods while at the same time ensuring that the correct tax debt
is ultimately collected by the Member States, EU legislation (in the form of Council Directive
2008/118/EC) 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.
Council Directive 2008/118/EC has replaced Council Directive 92/12/EEC
4
.
Most storage facilities and movements of excise goods need a guarantee, usually provided for
by the consignor at the place of dispatch, to cover for the fiscal risk.
Release for consumption occurs when goods are produced or are released from customs or excise procedures
which suspend payment of excise duty.
2
For instance, the excise duty of a lorry load of beer may be 25 000
€ in the UK and 3 000 € in Germany.
3
For instance, VAT is collected at each step of the supply chain and requires information reports for both sales
and purchases. Moreover, one firm’s revenues are another firm’s costs and consequently VAT evasion
incentives are mutually inconsistent.
4
Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise
duty and on the holding, movement and monitoring of such products, OJ L 076 of 23.3.1992
5
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Directive 2008/118/EC defines two types of procedures for moving excise goods between
Member States:
Duty suspension: this procedure provides relief to economic operators from having to
advance excise duties on production, processing, holding or movement of excise goods not
covered by a customs suspensive procedure
5
and before dispatch of the goods, thus
improving cash flow. It also ensures that excise duty is only paid once in the Member State
where the goods will be released for consumption. Member States impose stringent
conditions on the granting of authorisations for duty suspension.
Duty Paid: this procedure requires excise duties to be paid in advance at the place of
dispatch and then at destination (at which point the excise duty paid at dispatch may be
refunded). National registration or authorisation procedures tend to be simpler than duty
suspension, but there is an additional burden due to the need to process refunds.
1.3.
Evaluation of Directive 2008/118/EC
The Commission decided to carry out an evaluation of this regulatory area in the framework
of the Commission’s REFIT programme and submitted a report to the Council and the
European Parliament on the implementation and evaluation of Council Directive
2008/118/EC
6
in April 2017
7
.
This report was based on two external studies. The
first study,
on Chapter V of the Directive
(i.e. rules on movements of excise goods on which duty has already been paid) was published
in 2015 . The
second study,
which concentrated on Chapters III and IV of the Directive (i.e.
provisions on tax warehousing and electronic control system, for duty suspension procedures),
was published in 2016.
The Council adopted conclusions on this evaluation (see [R6]). Overall, further automation
and harmonisation is well supported providing it can be done at reasonable cost; measures to
enhance the fight against fraud are also welcome when not hampering legitimate trade. All
problems of this initiative are mentioned as areas for improvements in the Council
conclusions.
1.4.
Intervention Logic
During its evaluation process (see section 1.3), Directive 2008/118/EC was seen by most
stakeholders as an enormous improvement on its predecessor Directive 92/12/EEC.
Nevertheless, several areas for improvement were identified which constitute the drivers of
this initiative.
This initiative is part of the Commission's Regulatory Fitness and Performance
Programme (REFIT). All the selected options of this initiative (except baseline) will have
significant impacts on simplification and will reduce regulatory costs. Some selected
options will also have a positive impact on Small and Medium Enterprises (SME).
This initiative's objectives are described in chapter 4.
5
6
7
"Customs suspensive procedure" as defined in Article 4(6) of the Directive. The term will be adapted to match
the new customs term "special procedures," as used in Regulation n° (EU) 952/2013 (Union Customs Code).
Council Directive 2008/118/EC of 16.12.2008 concerning the general arrangements for excise duty and
repealing Directive 92/12/EEC, OJ L 9 of 14.1.2009.
COM(2017) 184 final:
https://ec.europa.eu/transparency/regdoc/rep/1/2017/EN/COM-2017-184-F1-EN-
MAIN-PART-1.PDF
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1.5.
Trans-European IT systems supporting the excise policy
The procedures related to excise goods under duty suspension are supported by two
paneuropean IT systems
8
:
EMCS: Excise Movement and Control System
This IT system supervises the cross-border intra-EU movement and export of excise goods
under duty suspension; each movement in EMCS must be declared to the system, before
the dispatch of the goods, via an "electronic Administrative Document" (e-AD) and is
uniquely identified by its "Administrative Reference Code" (ARC).
SEED: System for Exchange of Excise Data
This IT system is a registry of all Economic Operators authorised to trade excise goods
under duty suspension; each Economic Operator is uniquely identified in SEED by its
"SEED number".
It should be noted that pan-European IT systems have a lifespan of more than 20 years; so,
even relatively high initial investments might prove worthwhile and pay back after some
years.
The procedures related to excise goods released for consumption (i.e. for which duty has
already been paid) are all paper-based.
1.6.
Volume of excise trade and fraud
The amount of goods value, excise duty and estimated fraud (i.e. excise duty loss) in the EU
per year is summarised in the following table (see ANNEX IV for further detail). Excise fraud
is by its nature difficult to assess and is based on scarce data; consequently the fraud figures
should be treated with caution.
Volume of trade, duty and fraud for excise (in billion euros)
Value
Excise Duty
Import
432
34
Export
132
0*
Intra EU
270
57
Total
834
91
comment
* Exported goods are not subject to excise duty in the EU;
should the same goods be consumed in the EU, their excise
duty would be about EUR 14 billion
Estimates of excise duty loss that the policies in the scope of Directive 2008/118/EC may impact
Amount of fraud on which policy options related to
Duty loss
0.05
0.03
0.4
0.48
declared trade may have an impact
9
1.7.
Baseline
The baseline for this initiative is the following set of legal texts:
Excise legislation: Decision No 1152/2003/EC of the European Parliament and Council,
Directive 2008/118/EC, Council Regulation (EU) No 389/2012, Commission Regulation
(EEC) No 3649/92, Commission Implementing Regulations (EC) 684/2009,
(EU) 612/2013 and (EU) 2016/323;
8
9
A pan-European IT system is a set of IT applications and components at the Commission, each Member State
and each Economic Operator, integrated with each other in order to share information between all stakeholders.
Most fraud is from illicit trade, such as illicit production in the EU or smuggling to the EU, which is not
declared in any way and cannot be fought by declaration-based measures; this is why the policy options in the
scope directive 2008/118/EC have an effect on only a part of excise fraud.
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the Union Customs Code and related acts: Regulation (EU) 952/2013 of the European
Parliament and Council, Commission Implementing Regulations (EU) 2015/2446 and
(EU) 2015/2447;
the Recovery Directive 2010/24/EU and Commission Implementing Regulation
(EU) 1189/2011.
Some initiatives in Customs (e.g. evolutions of UCC Delegated Acts) or in Excise (e.g.
Alcohol duty) are in progress but they do not impact the "do nothing" option of this
initiative
10
. In other words, no other initiative is relevant for the status quo.
Unless explicitly stated otherwise in the impact assessment (see chapter 6), the consequences
of the status quo are assumed to evolve in a linear way with the volume of excise movements
or of economic operators concerned by the problem. Some uncertainty lies with this
assumption as the volume evolution forecast is not always accurate (especially for currently
non-optimally monitored movements) and that it is based on stakeholders' inputs and an EU-
wide extrapolation.
1.8.
Sources
Various sources were used for this impact assessment and their references are provided in
ANNEX V.
Unless explicitly stated otherwise in the text, figures come from document
[R5]
"Study contributing to an Impact Assessment on Council Directive 2008/118/EC
concerning the general arrangements for excise duty" .
Reference documents used in this report are provided in ANNEX V.
10
For instance, this initiative is about the rules and procedures for holding and moving excise goods cross-border
while the initiative for the alcohol directive defines the goods classification, duty exemptions and duty rates.
These topics are related but they can evolve independently of each other.
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2.
2.1.
W
HAT IS THE PROBLEM AND WHY IS IT A PROBLEM
Scope of this initiative
Directive 2008/118/EC is seen by most stakeholders as an enormous improvement on its
predecessor Directive 92/12/EEC. Changes related to the implementation of Directive
2008/118/EC, particularly EMCS, have saved Member States considerable administrative
costs, for example between EUR 27.5 and 37 million in 2014 alone. Economic operators have
also expressed their general satisfaction with the new arrangements. So, this initiative does
not change the scope of Directive 2008/118/EC.
Nevetherless, several areas for improvement were identified during the evaluation process
(see section 1.3):
Excise
–
Customs interactions, which consist of three independent categories
o
Export
o
Export followed by Transit or the use of a Single Transport Contract (STC)
o
Import
Duty Paid Business-to-Business (B2B)
Low risk movements
Exceptional situations
Excise and customs procedures are not always aligned or synchronised, which creates issues
when excise goods are imported or exported. For instance, excise and customs export
procedures and related IT systems are not always synchronised. Consequently, when
synchronisation fails, Economic Operators have to provide extra documents (the nature and
content of which are not harmonised at EU level and depend on each Member State's
requirements) to national excise authorities who will then have to check and close manually
the related excise or export procedures; only after that can the guarantee can be released.
In some situations the excise procedures are cumbersome or vary significantly from one
Member State to another. For instance some procedures are entirely paper-based.
Moreover, given the high fiscal risk for holding and moving excise goods under duty
suspension, which imposes constraints (e.g. high guarantee, tax warehouse, authorisation),
these arrangements are mostly used by large companies. SMEs rather use duty paid business-
to-business procedures, which are more adapted to small consignments and low numbers of
movements (lower guarantee and simpler authorisation but higher per-movement regulatory
burden).
All this causes extra administrative and compliance cost and effort for Economic Operators
as well as for excise and customs authorities, because some steps in the procedures have to be
performed manually (which is time- and resource-consuming) and subject to requirements
that vary from one Member State to another. Moreover, such steps are a source of tax fraud.
Note: some areas for improvement identified in the evaluations or in the Council conclusions
(see [R1], [R2] and [R6]) have not been addressed in this Impact Assessment. The
justification is provided is Annex VI.
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Problem tree:
MS and EO unclear about
their responsibility
Problem 1 -
Customs
–
Excise interactions
export
Problem 2 -
Customs
–
Excise interactions
export with transit or STC
Problem 3 -
Customs
–
Excise interactions
import
Problem 4 -
Duty Paid
Business-to-Business
EO:
- confusion & complexity
- hassle and compliance costs
- administrative burden
Excise-Customs complexity
(organisational, technical)
Excise-Customs legal bases
not explicit enough or not
aligned
Paper-based procedures
Little use by MS of
multilateral simplification
agreements
Excise’s legal base not explicit
enough for some goods or
situations
Problem 5 -
Low risk movements
MS:
- administrative burden
- fraud
Problem 6 -
Exceptional situations
causes
problems
consequences
2.2.
2.2.1.
Excise
–
Customs interactions: Export
Overview of the current situation
When excise goods under duty suspension are exported, an excise movement must first be
opened between the Member States of Dispatch and of Export; to do this, the consignor
declares the movement to the national excise authorities by lodging an electronic
Administrative Document (e-AD) at the Member State of Dispatch. From the Member State
of Export, where the customs export declaration is lodged, the supervision of the excise
movement under duty suspension continues in parallel with customs supervision, until the
external border of the EU. Once the goods have actually exited the EU, the Customs
authorities inform the Excise authorities, who close the excise movement in EMCS and end
the excise procedure
11
.
11
Two procedures are used in parallel in order to allow the maximum freedom for economic operators to modify
logistic arrangements whilst maintaining a secure oversight of the movement of excise goods by the
authorities. The arrangements allow traders to change from exporting goods to supplying a consignee within
the European Union, and vice versa
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Example: a wine trading business ("the consignor") in Spain sells wine to a client business in
Japan. The consignor has to manage an export of excise goods. He arranges for transport from
Spain to Japan via the port of Rotterdam (the Netherlands) where the goods will exit the EU.
He lodges accordingly an e-AD at the Spanish excise authorities and provides a guarantee for
this movement. Not familiar with the customs export procedure, he uses the services of a
customs broker business ("the customs declarant") who will manage all customs formalities
on his behalf. The customs declarant chooses to lodge the export declaration in France. In this
example, the Member State of Dispatch is Spain, the Member State and Office of Export is
France and the Office of Exit is the Netherlands.
No incident occurs during the movement and the goods leave Rotterdam and the EU. The
customs Offices of Exit informs the Office of Export of the exit of the goods and the export
procedure ends. The Office of Export informs the excise authorities in the Member State of
Export and the excise authories inform the Member State of Dispatch, which ends the excise
procedure and releases the guarantee.
2.2.2.
Problem Analysis
Firstly, export movements should be closed in EMCS based on an electronic exit results
message from the customs Export Control System (abbreviated as ECS). This message is
often not received from the customs authorities and the excise movements have to be
examined and closed manually.
Secondly, even if the exit results message is received, some exporters do not provide a
reference in the export declaration to the Administrative Reference Code (ARC) of the
matching excise declaration (e-AD), making it difficult or impossible for the system to apply
the exit results to the correct e-AD.
Thirdly, exceptional situations in the Customs export procedure (e.g. invalidation of the
export declaration; export declaration never lodged) are not always forwarded to the Excise
authorities.
These weaknesses translate into increased administrative costs for customs and excise
administrations. Consequently the advantages of process automation are lost because
movements have to be closed manually by matching exit results from ECS to e-ADs from
EMCS. Where there is no match the consignor has to be asked to provide an alternative proof
of exit, or risk losing the movement guarantee.
Moreover, the lack of the ARC in export declarations as well as the absence of systematic
cross check between export and excise procedures is a potential source of fraud (e.g. where
consignments of excise goods under duty suspension declared for export are actually diverted
to the EU's illicit market).
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Export events not forwarded to Excise
(e.g. export invalidation)
Exit Results not
forwarded to Excise
Excise
movement
closed
MS of
Dispatch
Excise supervision
MS of
Export
Supervision delegated to Customs
Excise waiting for notifications from Customs
e-AD
No cross-check
Export
declaration
Customs supervision
Exit
Results
Export declaration never submitted
Office of
Export
Office of
Exit
Exit Results never submitted
Example: re-using the same example as in the previous section.
If, after the goods have left the EU, no Exit Results is sent by the Office of Exit or if the exit
is not notified to the excise authorities, then the latter have no means to know that the export
procedure is complete. Consequently, the excise procedure remains open. At a point in time,
the consignor contacts the Spanish excise authorities and he is requested to provide
documents ("alternate proof of exit") to prove that the goods have exited the EU. The
consignor might have to get the requested documents from his client in Japan, the transporter
or another stakeholder in the movement. He then provides the documents to the excise
authorities, who end the excise procedure and release the guarantee.
If the traders happen to be fraudsters, they may move the goods with a valid e-AD to the
Netherlands, lodge an export declaration with a lower quantity than in the e-AD and then
fraudulently divert the difference in quantity on a vessel to a high-tax-on-wine Member State
such as Ireland or the UK. If there is no data cross-check between customs and excise, the
customs officers cannot know that the diverted excise goods should have actually been on a
vessel to Japan.
Magnitude of the problem
Regulatory burden: from the evaluation (see [R1]) Member State authorities and economic
operators consider the lack of synchronisation between the excise and export procedures as
being problematic. 22 of 27 Member States (80%) were of the opinion that the current
arrangements for the movement of excise goods under suspension were not coherent with the
arrangements, obligations and procedures applicable to customs operations and export.
41% of traders consider the absence of coherence between the excise and export procedures
as being a problem. The respondents stated they were not satisfied with the coordination
between excise and customs procedures.
Volume: the following table summarises the volume of excise movements with destination
export. A "direct" movement in this context means a movement for which the Member State
of Dispatch is the same as the Member State of Export (the use of EMCS is not mandatory in
this case, although the Member State of Dispatch/Export must be in a position to transfer e-
AD data to the Office of Exit and to the competent authorities of any Member State through
which the goods pass on request).
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Number of movements
total (1000 / year)
closed automatically
direct
12
1,200
< 77%
indirect
13
16
25%
Comment
Member State with highest volume:
France 24%, Germany 13%, The
Netherlands 12%, United Kingdom
7%
At least 288 000 movements per
year are closed manually
Fraud: the estimate for the excise fraud related to this problem area is EUR 28 million per
year (see [R5]); however this figure is based on very scarce data and is consequently to be
treated with great caution (see section 1.6).
Problem tree
The following schema summarises the current problem.
MS and EO unclear about
their responsibility
Exit results
not forwarded to Excise
Economic Operators:
- guarantee not released
- regulatory burden
Export exceptions
not reported to Excise
Excise-Export complexity
(organisational, technical)
Insufficient cross-reference
and data cross-check
Excise-Export’s legislation
not explicit enough
Member States:
- close movements manually
Insufficient proof of Exit
Member States: fraud
causes
problems
consequences
2.3. Excise
–
Customs interactions: Export followed by Transit or using a Single
Transport Contract (hereafter: STC)
2.3.1.
Overview of the current situation
In addition to the combination of EMCS and ECS other procedures are sometimes used to
supervise the export of excise goods: the external and internal transit procedure and Single
Transport Contracts (STC). It appears that the use of these procedures simplify export
operations for economic operators because it allows them to close the export procedure at the
start of transit or STC, and therefore completing the movement in EMCS.
The Single Transport Contract is a multimodal contract which can be used for the export of
goods. Under Article 329(7) of Regulation (EU) n° 2015/2447 the export procedure is closed
when STC starts. As of this moment the goods may be taken over under STC by lorry, train,
ship or plane and the mode of transport may change several times before the goods physically
12
Source: Member State replies to stakeholders' consultation and ECS statistics (see document [R5]); all export
movements (23%) that are closed manually require also a manual closure of the related excise movements.
More excise movements are likely closed manually due to a lack of excise-export synchronisation at national
level but no data is available. So, 7% is the lower bond of direct movements closed manually.
13
Source: EMCS statistics (see
CIRCABC);
1300 movements with destination export are open per month, out of
which 330 are closed by a report of export; others have to be closed manually.
13
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leave the Union (exception: it is not permissable to use a lorry to cross the external border of
the customs territory). Under STC there is no further customs supervision and no customs
guarantee.
The problem outlined under point 2.3.2. concerns export movements of excise goods through
more than one Member State before exiting, i.e. the excise movement starts in one Member
State and transits at least one more Member State before the goods exit. If transit or STC is
used the excise goods are not covered by EMCS which is closed when the exit is confirmed.
In this case exit is confirmed when transit or STC starts and consequently EMCS is closed at
that moment, and not when the goods physically leave the Union. The excise guarantee is
released in the Member State where EMCS is closed. If the excise goods thereafter transit
another Member State before they exit the European Union a guarantee has to cover this part
of the movement. This is not provided for by STC arrangements and may not be usable under
certain transit arrangements. This means that not only the budget of the Member States where
the movement starts is concerned but as well the budget of the Member States through which
the goods transit and the budget of the Member State of exit.
Under Article 329 (5)
–
(7) of Commission Implementing Regulation (EU) n° 2015/2447
(Implementing Act of the Union Customs Code, hereafter: UCC/IA) it is possible to export
goods by using the combination of export followed by external or internal transit or export
followed by STC. But the simplifications lack a legal base for excise goods in excise law.
Under Article 4(6) of Directive 2008/118/EC external transit can only be used instead of
EMCS for non-Union goods under excise duty suspension at entry. For export of Union goods
the use of external transit is not provided for in this article. Internal transit is not covered at all
by Article 4(6). External and internal transit may not be used, after export, instead of EMCS,
to move Union excise goods to the place of exit.
Article 17(1) (a) (iii) of Directive 2008/118/EC lacks a provision to end a duty suspension
arrangement at the Office of exit.
Articles 20(2) and 25 of Directive 2008/118/EC require the excise movement to end and its
guarantee to be released only when the goods have physically left the territory of the Union.
2.3.2.
Problem Analysis
Articles 4(6), 17(1) (a) (iii), 20(2) and 25(1) of Directive 2008/118/EC are not in line with the
Article 329(5)-(7) UCC/IA as indicated in point 2.3.1. The use of these simplified export
procedures may put the financial interests of Member States at risk if the guarantees are
released before the goods have exited, proofs of exit are insufficient and supervision is too
weak.
Under the Directive the whole movement of excise goods must be secured by a guarantee
until the goods exit. Confirmation of physical exit ends the movement and leads to the release
of the excise guarantee. In practice, when export is followed by transit or STC, the
confirmation of exit is sent by ECS before the physical exit of the goods and the guarantee is
released too early.
As regards STC the exit message is sent by ECS and EMCS is closed when the goods are
taken over by the STC in accordance with Article 333(2)(d) UCC/IA. The goods move on the
territory of the Union without any excise or customs supervision. There is no authorisation
14
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requirement for the use of STC either.
transporter.
The supervising responsibility lies with the
As regards internal transit, Article 333(2) (c) UCC/IA allows the transmission of the exit
message before the transit procedure is discharged. Moreover, the completion of an internal
transit procedure in the customs territory of the Union does not prove the exit of goods;
indeed, goods under internal transit remain Union goods and customs supervision for the
Union goods ends when transit ends. So, after internal transit has ended, the goods might
properly leave the territory of the Union, but they might as well stay. If they leave, they do so
without any physical proof of exit.
When using external transit after export the exit message is also sent when transit starts. The
goods move on the customs territory of the Union under customs supervision and under a
customs guarantee associated with the external transit procedure. Since the goods become non
Union goods when they are placed under external transit, customs supervision only ceases
when the goods physically exit.
In all cases under Article 329(5)
–
(7) UCC/IA the excise guarantee under EMCS is released
when goods are still moving on the territory of the Union. For external transit a customs
guarantee also covers the excise debt until the goods exit because the goods become non-
Union goods when placed under external transit. For internal transit a customs guarantee also
covers the excise debt, but only until the end of transit, not until the physical exit of goods.
For STC there is neither an excise nor a customs guarantee once the goods are taken over
under the contract.
For the above mentioned reasons, which clearly indicate the fiscal risk of the use of internal
transit and STC after the export procedure for excise goods, internal transit and STC are not
further examined.
Magnitude of the problem
Of the total number of export movements in 2016 99% are direct exports (the Member States
in which the excise movements begin are the same as the Member States in which they end)
and are therefore of national responsibility. This percentage includes the use of
external/internal transit and STC, where the goods physically move through other Member
States after the sending of exit results.
28% of all exports were carried out using the export procedure followed by external/internal
transit and STC (14% external transit, 5 % internal transit, 9 % STC). In these cases EMCS
was closed at the start of transit or STC. This figure also includes the possibility that EMCS
was not used at all where the excise duty suspension and the export control procedures are
completed in the Member State of Dispatch (where excise movement begins), with only the
following transit procedure or the STC involving more than one Member State.
External transit
The study shows that export followed by external transit, replacing EMCS, seems to be
common practice (14% of all exports= 229,000 movements); but it shows as well that
the customs guarantee lodged for external transit is sufficient to cover the fiscal risk.
The answers from economic operators show that external transit after export is currently
limited to large companies.
Internal transit
15
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The study shows that export followed by internal transit, replacing EMCS, seems to
concern only 5% of all export movements (80,000 movements). Six out of 31
interviewed companies used internal transit after export for more than 250 million Euro
worth of goods. It is primarily used by Member States having a border with a common
transit country (e.g. Switzerland). 50% of economic operators interviewed use internal
transit. No SME declared that they used it. The guarantee level seems sufficient as
long as the goods move under transit. But once transit ends the Union goods are no
longer covered by any guarantee. There is a fiscal risk for internal transit ending in the
EU.
Single Transport Contract (STC)
The study shows that export followed by STC, replacing EMCS, seems to concern
only 9% of all export movements (152,000 movements). STC presents a fiscal risk
because no excise or customs guarantee covers the movement. The excise guarantee
is released when the goods are taken over by the Single Transport Contract. If the
growth of 40% in STC movements in 2016 resulted from fraud, it would mean that
1.5% of excise export could have been diverted to the EU market. This, in turn, would
result in EUR 21 million losses in excise revenues of EU MS. 12 out of 31
interviewed companies declared the use of STC with excise goods. Four of them
exported yearly for more than 250 million Euro worth of goods.
All three options under Article 329 (5)-(7) are currently used. The estimated amount of 28%
of all export operations (whether direct or indirect) of excise goods represents roughly
461,000 movements. Proportionately external transit is used the most.
Fraud: Fraud in transit and STC cannot be observed directly in statistics. Hence, the
interviewed Member States and economic operators are not aware of the scale of fraud.
Weak evidence of excise
duty exemption
No proof of physical exit
Use of external transit,
internal transit and STC
instead of EMCS, based
solely on Art. 329 (5)-(7)
UCC/IA - Reg. (EU) n°
2447/2015
Excise supervision ends
and EMCS guarantee is
released before physical
exit of goods
Weak supervision
Legal uncertainty
Economic Operators:
confusion and
complexity
consequences
Member States: fraud
opportunitites since
lack of clear guarantee
provisions and no
EMCS supervision
causes
problems
16
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2.4.
2.4.1.
Excise
–
Customs interactions: Import
Overview of the current situation
At import of excise goods into the EU, the customs declarant
14
may declare that the excise
goods will be moved to another Member State under excise duty suspension or be stored
under excise duty suspension in a tax warehouse in the Member State of Importation.
2.4.2.
Problem Analysis
In the case of storage in a tax warehouse in the same Member State, all procedures are under
the sole responsibility of that Member State.
In the case of a movement to another Member State, a cross-check between customs import
declarations and excise electronic Administrative Documents (e-AD) or the registry of excise
economic operators (SEED) is rarely carried out. Therefore it is currently difficult to know if
the goods are actually moved under duty suspension after importation.
Moreover, there is currently no common list of requirements for excise duty exemption at
import. Member States have their national ones and consequently this leads to complexity and
confusion for economic operators.
SEED (traders allowed to
store or move excise goods
under duty suspension)
1) Goods moved to another MS
MS of
Dispatch
Excise supervision
MS of
Destination
e-AD
No cross-check
Import
declaration
2) Goods stored in same MS
National matter
Tax Warehouse
Customs supervision
Office of
Entry
Release for free circulation
exempted from excise duty
No EU common requirements
Magnitude of the problem
Regulatory burden: from the evaluation (see [R1]),
economic operators expressed concerns over
the arrangements for importation, with 17% having some concerns, mainly due to national
variations in reporting requirements causing increased administrative and compliance costs. On
the other hand, 19 out of 27 Member States expressed concerns about the lack of coherence
14
The person who or on whose behalf the customs declaration is lodged.
17
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between import procedures and the handover to EMCS, indicating that further harmonisation of
procedures might help to alleviate administrative burden and compliance costs.
From the Surveillance database
15
and the stakeholders' consultation (see [R5]), the volume
estimates are as follows:
Volume of imports with excise goods moved under duty suspension to another
Member State and their share in all imports of excise goods
Value of the
Excise duty
15
16
goods
Import declarations
share
(billion euros)
(billion euros)
2012
18,200
6%
n/a
n/a
+42% compared to 2012
2016
25,860
8.3%
36.0
2.8
+4% compared to 2016
2021
26,900
9%
37.4
2.9
Fraud: the estimate for the excise fraud related to this problem area is between EUR 20
million (see [R5]) and EUR 50 million per year; the latter figure is extrapolated from the
assessed intra-EU fraud pro-rated to the volume of goods moved to another Member State
after import
17
. Both figures come from scarce data and are consequently to be taken with
caution (see section 1.6). Still, the significantly higher number of movements under duty
suspension after import in 2016 than in 2012, which cannot be explained by economic factors,
may be an indicator of an increase of fraudulent movements.
Problem tree
The following schema summarises the current problem.
No customs
–
excise
data cross-check
Weak evidence of
Excise duty exemption
No common requirements
for Excise duty exemption
Member States: fraud
Economic Operators:
- confusion and complexity
causes
problems
consequences
2.5.
2.5.1.
Duty Paid Business-to-Business (B2B)
Overview of the current situation
The current procedure for moving goods already released for consumption (i.e. for which
excise duty has already been paid) between Member States is a paper-based procedure. B2B
duty paid movements are covered by a paper document called the Simplified Administrative
Accompanying Document (SAAD). It consists of three copies where the first copy is kept by
the Economic Operator that initiates the movement of the goods ("the consignor") at the
15
The Surveillance database monitors the volume of goods imported into the EU:
https://ec.europa.eu/taxation_customs/online-services/surveillance_en
16
Assuming the value of the goods and excise duty at import (see 1.6) are proportional to the share of imports
followed by a movement under duty suspension to another Member State.
17
For intra-EU trade, the value of the goods and the excise duty loss in the scope of this initiative represent EUR
270 billion and EUR 400 million per year respectively; the volume of goods moved to another Member State
after import representing EUR 36 billion per year, the related fraud estimate is 400 * (36/270) i.e. about EUR
50 million per year.
18
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Member State of Dispatch while the two other copies accompany the goods. At destination,
excise duty is paid, the second copy is kept by the recipient Economic Operator and the third
copy is returned to the Member State of Dispatch, at which point the excise duty at Dispatch
may be refunded.
2.5.2.
Problem Analysis
The procedures for moving excise goods between businesses in different Member States,
where excise duties have already been paid (which should be of particular interest for small
and medium enterprises), are out of date, unclear and burdensome. In particular, the current
procedures are all paper-based and consequently long and inefficient.
Other practical problems reported were variations between national requirements (e.g.
documentary requirements for reimbursement) as well as a lack of clear information about
national procedures, leading to discriminatory situations for businesses.
Magnitude of the problem
Regulatory burden: from the evaluation study (see [R2]), it appears that the current
arrangements are perceived as burdensome and inefficient by both Member States and
Economic Operators.
10 out of 12 Member State administrations perceived the paper-based system as being more
burdensome and time-consuming than automated or electronic processes
18
. Three Member
States were able to provide some approximate estimates on time spent to handle one average
business-to-business (B2B) movement. Average processing time varied between 4 and 8
hours depending on the nature of the consignment. This compares with a few minutes on
average for the administration of an EMCS movement.
Well over half of the B2B
Economic Operators
surveyed had already chosen not to move their
products between Member States due to the current arrangements. The main reasons cited were
high administrative costs (36
Economic Operators
out of 44 who replied) and unclear
requirements leading to legal uncertainty (21
Economic Operators
out of 44). The majority of
Economic Operators
considered the duty paid B2B arrangements to be more burdensome than
using EMCS.
As summarised in the table here below, the duty paid B2B procedures are much less used than the
duty suspension ones. Indeed, economic operators and movements represent about 3% of the
number of excise Economic Operator and movements that use the duty suspension procedures.
Duty Paid B2B procedures are mostly used for alcohol products and represent an even smaller
part of the total value of excise goods moved cross-border within the EU.
Number
18
%
Comment
the other 2 did not express an opinion
19
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Number of Economic
Operators
Number of
Movements / y
Goods value (million
euros / y)
6350
100,000
200
3.0%
SME use mostly outbound movements
Large companies use both in- and outbound movements
2021 forecast: +6% compared to 2016
Netherlands 7%, Germany 5%
3.0%
Member State with highest volume: France 7%, The
0.1% 90% of Duty Paid B2B movements are with Alcohol
Fraud: the available data on excise fraud via Duty Paid B2B come from scarce Member State
inputs and is assessed at EUR 20 million per year (see section 1.6 and ANNEX IV). This is
much higher than for duty suspension procedures, proportionally to the value of the goods.
Problem tree
The following schema summarises the current problem.
Weak evidence of
duty payment at destination
Member States: fraud
Paper-based procedures
Movements poorly
monitored
Economic Operators:
- long refund, burdensome
Manual and long
procedures
Member States: burden
- process & store papers
causes
problems
consequences
2.6.
Low Risk Movements
All current procedures for moving excise goods between businesses in different Member
States have some significant cost(s) and effort overhead. They may also take some time
during which the goods cannot be moved or released, and the guarantee is immobilised. These
procedures apply to all movements of goods, even the ones for which the amount of excise
duty and the fiscal risk are low. In particular, certain goods, such as completely denatured
alcohol or certain energy products, are either exempt from excise duty, are taxed at very low
rates or are sold in quantities where the excise duty charged is small in comparison with the
economic value of the goods.
Moreover, Member States currently seem to make little use of Article 31
19
, because of the
difficulties of negotiating bilateral or multilateral schemes.
Low risk movements are defined for the purpose of this option as consignments whose excise
duty is less than 1000€ or than 20%
of the net value of the goods.
However, the study contributing to the impact assessment highlighted that:
the definition of "low risk" generated confusion in the Member States;
the magnitude of the problem was uncertain as two analysis led to very different results;
19
Simplifications via bilateral or multilateral agreements between some Member States
20
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several Member States reckoned the fiscal risk was far from negligible and are very
reluctant to allow simplifications for these movements.
Definition of low risk products
The vast majority of respondents, especially those from MSAs, had significant problems
estimating both the number of low-risk movements and the excise duty concerned. In fact,
only six out of the 19 MS that responded to the question were able to provide any kind of
answer. The most important obstacles were the lack of clarity as to what kind of movements
should be classified as “low risk” or the belief that no movement of goods could be
considered “low risk” (Latvia explicitly reported 0 movements of the type).
The analysis of the answers provided by the MSAs suggests that despite the fact that a
definition of “low-risk movements” was provided in the questionnaire, the understanding of
what constitutes a “low-risk product” is not clear (for instance, the Netherlands does not
consider beer a low-risk good, nor does Poland consider denatured alcohol a low-risk good).
In fact, “low-risk movements” vary from country to country, and the term is in itself very
controversial.
The data provided by Economic Operators in questionnaires suggest that, on average, low-risk
movements constituted between 1.6% and 2.2% of all their movements. In terms of excise
duty, its value within Economic Operator’s low-risk
movements fell between 0.4% and 2.4%
of the value of excise on all movements performed by Economic Operators.
Furthermore, economic operators did not believe that there would be any substantial growth
in the number of low risk movements in the next five years.
Some Economic Operators supported this simplification but others mentioned its optionality
and the fact that it introduced another type of arrangement for moving excise goods between
Member States did not make it very attractive.
To test the approach a VAT-like arrangement for goods was suggested where the excise duty
due was less than or equivalent to 20% (used as a proxy for the VAT rate). Using Intrastat
data, the contractor was able to estimate that in 2015, the value of the low-risk intra-Union
supply of goods such as wine and beer (CN2203, CN2204, CN2205, CN2206)—that is, the
supply of goods between countries in which the value of excise duty on these goods was
below the 20% threshold—amounted to approximately 46.1% of the value of the total intra-
Union supply of alcoholic beverages
20
. The value of the low-risk intra-Union acquisition of
these goods was estimated to amount to approximately 23.3% of the value of entire intra-
Union supply of alcoholic beverages. However, these estimates are based on a comparison
between the excise duty due in the Member State of supply compared with the VAT burden,
but not on the excide duty rates of the Member State where the products are consumed, nor
the excise rates for these products for Member States though which these goods are moved on
their way to their destination. Therefore the high percentage of the volume of these products
is more a result of the analysis method, than a real estimate of the possible usefulness of
simplifying procedures associated with these goods.
Still, it appears that the perception of low risk is dependent on excise duty rates. For example,
there is a strong correlation between being a wine producing Member State and having a low
or zero excise duty rate on wine. Conversely there is also a strong correlation between not
being a producer Member State or being a consumer Member State and having a high rate of
duty on wine, e.g. Finland has an excise duty rate of EUR 3.39 per litre of still wine, and
20
The same analysis for energy products and tobacco showed that the value of goods moved that fell into the
same analysis category were negligible.
21
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Ireland has a rate of EUR 4.24 per litre. This makes such a simplification popular in producer
Member States and very unpopular in non-producer, consumer Member States.
The option for low risk movements was however not supported by several Member States due
to the difficulty to unambiguously define "low risk," as the excise duty rate and consequently
the fiscal risk varies greatly from one Member State to another. Moreover, under the existing
arrangements it is still open to neighbouring low risk countries to make bilateral agreements.
Therefore despite the initial attractiveness of an arrangement for low value or low risk goods
there appears to be little justification in exploring this particular option further.
2.7.
2.7.1.
Exceptional Situations
Overview of the current situation
Exceptional situations may occur during the movement of excise goods under duty
suspension:
Shortage: the quantity of goods that arrived at destination is lower than the quantity
declared at dispatch (e.g. due to part of the goods being diverted during the transport or due
to natural evaporation of volatile goods);
Excess: the quantity of goods that arrived at destination is higher than the quantity declared
at dispatch (e.g. due to an input error when declaring the goods at Dispatch);
Rejection: the consignee informed the National Authorities and the consignor that he
refuses to take any responsibility for the goods (e.g. because he did not order them);
Interruption: a National Authority cancelled the movement of excise goods (e.g. after a
control or a total destruction of the goods).
Moreover a significant quantity of some type of goods might evaporate during transport or
storage (e.g. evaporation losses in petrol tanks), which causes a "natural shortage" or a
"natural loss".
These situations are not all described in detail in the legislation, which leads to different
procedures and rules being used in different Member States and consequently to complexity
and confusion for Economic Operators. For instance, different Member States may have
different ways to assess shortages and excesses and different thresholds for allowable natural
losses. They may also have different ways of dealing with rejections, interruptions or in a
review of a public authority's decision (i.e. when an organisation disagrees with a decision of
a public authority, aka "right to be heard").
2.7.2.
Problem Analysis
Uncommon, exceptional situations represent a high regulatory burden to Economic Operators.
Depending on the country, exceptional situations may lead to irregularities, duty claims,
penalties or seizure of the goods.
The current ambiguities in exceptional situations have the following consequences:
Dispute: the details of an electronic administrative document (e-AD) cannot be amended
once the latter has been accepted by the Member State of Dispatch, leading to disputes
about quantities and excise duty payable. While national jurisdictions usually provide some
recourse ("right to be heard") when adverse decisions are made, the ease of challenging
such decisions in the field of excise seems to vary greatly.
22
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Recovery: claims against economic operators may make use of the provisions of Directive
2010/24/EU (the Recovery Directive) if other requests for payment of excise duty are
unsuccessful. The use of the instruments provided by the Recovery Directive among
Member States varies. In some cases they are not used at all. Moreover, there is no clear
basis for linking recovery instruments with a previous establishment of an excise duty
liability.
Follow Up: once an exceptional situation has occurred, it is unclear what follow up actions
(e.g. return rejected goods to the location of dispatch) must or shoud be undertaken by the
consignor or other stakeholder involved in the movement.
Magnitude of the problem
Regulatory burden: even though exceptional situations represent a small part of all
movements of excise goods, the related administrative burden and compliance or hassle costs
are quite significant as illustrated in the table below.
Movements
Number
%
Current volume / year
Interruptions
Rejections
Excesses/Shortages
2021 forecast
Member States
Economic Operators
3,400
600
240,000
+5%
stable
0.11
0.02
8
21
Value of goods
M€
%
Comment
Source: EMCS statistics
54
0.02
Source: [R5]; amount of shortages
+13 to 29%
stable
Compared to 2016
Note: Member State expect a significant increase of exceptional situations in the next five
years while Economic Operators consider they will remain at a similar level as currently.
Cross-border recovery issues are mostly due to lack of guarantee on a disputed movement,
lack of familiarity with recovery tools or language
22
; no data from Member States is available
on the volume of the recovery issues for excise, such as the amount of excise duty to be
recovered in another member State.
21
Member States and Economic Operators report 4.6% and from 6.2 to 11.4% respectively, of their movements
with a shortage or excess; this leads to an average of about 8%.
22
The cost of an official translation may be higher than the debt to be recovered
23
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3.
W
HY SHOULD THE
EU
ACT
The EU’s right to act in the area of excise duties is established in Article 113 of the Treaty on
the Functioning of the European Union, which permits the EU to lay down harmonised rules
in order to ensure the proper functioning of the internal market.
For many years the Commission has worked with Member States in harmonising and
simplifying customs and tax administrative procedures, because there is a common
understanding that such initiatives are both useful and necessary to the functioning of the
Single Market.
The Commission's work in the area of excise harmonisation has been facilitated by financial
instruments agreed by the European Parliament and the Council. Up until 2014 the financial
instrument in use was Fiscalis 2013
23
. The use of this instrument was evaluated and a Report
from the Commission to the European Parliament, the Council, the European Economic and
Social Committee and the Committee of the Regions.
24
The evaluation concluded that the Fiscalis 2013 programme contributed to reducing
regulatory costs in three ways: (i) through standardising the exchange of information between
tax administration (e.g. through e-forms), (ii) by providing platforms for secured exchange
(i.e. the interoperability platform with all IT applications therein anchored), and (iii) by
providing common IT systems to be used directly by the tax administrations (e.g. the EMCS
or the VIES
25
). The stakeholders consulted within the evaluation were not able to identify any
national or international alternatives to the close collaboration facilitated by Fiscalis 2013,
which could have delivered a similar or higher reduction of regulatory cost to national
administrations and economic operators.
The scenario of achieving similar levels of cooperation acting bilaterally or multilaterally with
EU involvement was considered inconceivable by stakeholders. The Commission’s role of a
coordinator and facilitator was also recognised by stakeholders and it was recommended that
it should be continued.
Similar conclusions were reached by stakeholders in relation to IT systems: many of the IT
systems are not just a ‘nice-to-haves’ but they are actually underpinning legislation
(e.g. the
EMCS or the requirements of the legislation on administrative cooperation) and their
discontinuance would put a strain on the compliance with the EU tax acquis.
In this impact assessment, 70 to 83% of the respondents in the stakeholders' consultation
consider an EU action is useful or necessary (see also ANNEX II), which reinforces the
general conclusions from the evaluation of Fiscalis 2013
26
.
The general conclusions from the Fiscalis 2013 evaluation concerning the need for EU action
can be applied to the specific policy options being examined here.
23
Decision No 1482/2007/EC of the European Parliament and of the Council of 11 December 2007 establishing
a Community programme to improve the operation of taxation systems in the internal market (Fiscalis 2013)
and repealing Decision No 2235/2002/EC;
24
COM(2014) 745 final
25
VAT Information Exchange System
26
Fiscalis 2013 has been superseded by the Fiscalis 2020 program, which now funds excise automation
activities. Legal act: Regulation (EU) No 1286/2013 of the European Parliament and of the Council of 11
December 2013 establishing an action programme to improve the operation of taxation systems in the
European Union for the period 2014-2020 (Fiscalis 2020) and repealing Decision No 1482/2007/EC.
24
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Alignment with Customs Procedures
Customs and excise legislation should be aligned. Legal certainty at EU level reduces
administrative burden and compliance costs for economic operators and Member States
authorities and reduces the fiscal risk.
An absence of action at EU level will basically leave the situation as-is, where different
Member State implement different rules, which creates confusion to economic operators and
increases their costs. Currently there are no EU wide arrangements in place which allow for
the the hand-of between customs and excise procedures. This leads to a lack of legal certainty
and inevitably increased costs, both for economic operators and for competent authorities.
Individual national solutions are possible, but confront economic operators with different
national requirements, thereby distorthing the Single Market.
Duty Paid B2B
The current paper-based procedures for the Duty Paid B2B movements share the weaknesses
of the previous paper-based system for the movement of excise goods under duty suspension
(i.e. no real time monitoring, unclear reporting requirements, vulnerability to fraud and
frequent delays in the release of guarantees as well as in the refund process) have to be
improved and simplified. National improvements, such as national registration of economic
operators and national automation of movement control are of little use since the goods are
already released for consumptions when they are dispatched. Only improved EU-wide
coordination of arrangements has anadded value due to the need to share common data and to
use common interoperability standards betten data from different Member States.
Exceptional Situations
Lack of a common action at EU level increases costs to both national authorities when dealing
with situation that involve more than one Member State and also to economic operators
because of the use of different national rules.
25
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4.
4.1.
W
HAT SHOULD BE ACHIEVED
General objectives
The general objectives of the initiative are:
To ensure the proper functioning of the internal market
–
by reducing obstacles to
intra-EU cross-border trade.
To safeguard the financial interests of the Member States
–
by ensuring that excise
duty due are properly collected to feed national budgets.
In pursuing these objectives, the initiative seeks to keep a balance between the need to
facilitate cross-border trade and the need to ensure that effective controls are in place in order
to monitor the holding and movement of excise goods, and ultimately to ensure the excise
debt is collected (owing to the risk inherent in cross-border movements of excise goods; see
section 1.1).
4.2.
Specific objectives
The specific objectives of the initiative are:
To reduce tax obstacles by minimising costs for businesses and administrations
Tax obstacles can be removed and administrative and hassle costs for business and
administration can be reduced by simplifying the current procedures and by automation
(e.g. duty paid business to business procedures), which increases productivity of staff,
makes processing faster and immobilises guarantees for a shorter period of time.
To establish a clear and consistent framework for free movement of goods
A clear and consistent framework for the free movement of excise goods can be achieved
by synchronising better excise and customs procedures, harmonizing current movement
and holding procedures and defining common rules at EU level. This shall reduce
confusion and complexity for Member States and economic operators;
To ensure equal treatment for businesses (neutral competition)
Equal treatment ensures that each Member State does not directly or indirectly discriminate
against Economic Operators from other Member States by treating them differently. The
only example within the scope of Directive 2008/118/EC is the national obligation to
appoint a fiscal representative for distance selling, which is not within the scope of this
initiative;
To allow the proper monitoring of movements of excise goods
The monitoring of the movement and holding of excise goods can be improved by further
automation (e.g. automation of duty paid business to business procedures);
To reduce illicit trade, evasion and abuse (fraud)
The proper monitoring of the movement and holding of excise goods, more data cross-
checks and increasing data quality and consistency contribute to the reduction of fraud.
Even though the amount of excise duty fraud in the scope of this initiative, estimated to
about EUR 480 million per year (see 1.6), represents only a fraction of the excise duty, it is
still a significant amount in absolute value, worth reducing.
26
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1900876_0028.png
The following schema illustrates which specific objectives meet which general objectives.
Specific Objectives
Reduce tax obstacles by
minimising costs for
businesses and
administrations
Establish a clear and
consistent framework for
free movement of goods
Ensure equal treatment
for business (neutral
competition)*
General Objectives
Ensure the proper
functioning of the
internal market
Allow the proper
monitoring of movements
of excise goods
Reduce illicit trade,
evasion and abuse
(fraud)
Safeguard the financial
interests of the
Member States
* this specific objective is not targeted by this initiative
4.3.
Linking the objectives to the problems
Table 1: Links objectives-problems
Specific objectives
To reduce tax obstacles by
minimising costs for businesses
and administrations
To establish a clear and consistent
framework for free movement of
goods
To allow the proper monitoring of
movements of excise goods
To reduce illicit trade, evasion
and abuse (fraud)
4.4.
Assessment criteria
Link to the problems
Addresses the problems of excise-export interactions, duty
paid business-to-business and exceptional situations (see
2.2, 2.5 and 2.7)
Addresses all problems described in this initiative
Addresses the problems of excise - customs interactions
27
,
duty paid business-to-business (see 2.2 to 2.5)
Addresses the problems of excise
–
customs interactions
and of duty paid business-to-business (see 2.2 to 2.5)
All solutions (policy options) envisaged to fix the problems are assessed based on the
following criteria:
Regulatory costs and benefits
–
benefits can be direct benefits or cost savings; in most cases, the costs and benefits are
quantified; in the rare cases where not enough data is available, a qualitative*
assessment is used for comparing policy options. The following split of regulatory costs
and benefits is available in this report:
o
Administrative costs and benefits for Member States
o
Enforcement costs and benefits for Member States
o
Regulatory costs and benefits for Economic Operators
27
For the excise-customs interactions, the problem addressed is to ensure there are no breaks in the monitoring of
movements between the excise supervision and the customs one.
27
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1900876_0029.png
This criterion is used for assessing if specific objectives "reduce tax obstacles by
minimising costs" and "establish a clear and consistent framework for free movement of
goods" are reached.
Market and SMEs
–
this criterion assesses the impact on the market of trading excise
goods and on the excise business of Small & Medium Enterprises; a qualitative*
assessment is used for comparing policy options.
This criterion is used for assessing if specific objectives "reduce tax obstacles by
minimising costs" and "establish a clear and consistent framework for free movement of
goods" are reached.
Fraud
–
this criterion assesses the impact on the fight against excise fraud; some figures
are provided in the impact assessment text of chapter 8; however these figures are based
on scarce data and are treated with caution; hence when comparing policy options, only
a qualitative* assessment is used.
This criterion is used for assessing if specific objectives "reduce illicit trade, evasion
and abuse" and "allow the proper monitoring of movements of excise goods" are
reached.
Effectiveness and Efficiency
–
these criteria assess how cost-effective policy options are
and how well they would actually address the problem; a qualitative* assessment is
made, actually consolidating the assessment of the previous criteria (regulatory costs
and benefits, market & SMEs, fraud).
These criteria are used for all specific objectives.
* Qualitative assessments use a series of '-' minus (for negative impact) and '+' plus signs (for
positive impact). A higher number of '+' or '-' means that, within a given problem area, an
option has a more positive or negative impact respectively than others.
4.5.
Consistency with other EU policies and with the Charter for fundamental rights
The main objectives of the initiative are lowering regulatory costs for Member States and for
Economic Operators trading excise goods across the EU and reducing cross-border excise
fraud.
Reducing administrative burdens, particularly for SMEs, is also an important objective
highlighted in the EU’s growth strategy for the coming decade (Europe 2020 –
A strategy for
smart, sustainable and inclusive growth
28
).
As excise duty and VAT are usually collected at the same time and location, the policy
options of this initiative propose a similar approach to VAT, wherever applicable and possible
given the inherent fiscal risk of excise goods.
It would also be consistent with the EU objectives under REFIT
29
.
The objectives envisaged do not affect fundamental rights.
28
29
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:2020:FIN:EN:PDF
Regulatory Fitness and Performance programme:
http://ec.europa.eu/info/law/law-making-process/overview-law-making-process/evaluating-and-improving-
existing-laws/reducing-burdens-and-simplifying-law/refit-making-eu-law-simpler-and-less-costly_en
28
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5.
5.1.
W
HAT ARE THE VARIOUS OPTIONS TO ACHIEVE THE OBJECTIVES
Excise
–
Customs interactions: Export
Several policy options are envisaged:
Option 1: Do nothing (baseline)
Option 2: Data cross-check
Option 3: Automated process synchronisation
Option 4: EU common list of Alternate Proofs of Exit
They are summarised in the figure here below and detailed here after.
5.1.1.
Option 1: Do nothing (baseline)
This policy option leaves the current situation as-is.
5.1.2.
Option 2: Data cross-check
This policy option is a systematic cross-check of data between the customs export
declarations and the excise declarations (e-AD), which aims at reducing fraud. The data cross-
check may be automated or manual, up to each Member State's decision
30
. This option would
be mandatory for indirect
31
movements of excise goods with destination export and
recommended for direct movements.
This policy option would oblige the declarant
32
to provide the reference of the excise
movement (aka Administrative Reference Code) and of its consignor (aka SEED number) in
the export declaration.
Two types of data cross-checks are proposed and assessed. The first one verifies that the ARC
and SEED numbers referred to in the export declaration exist in the excise systems and are
valid
33
, on a per-export-declaration basis. The second type would be a more thorough cross-
30
For instance, Member States with a low volume of export movements of excise goods may assess that the
automation of data cross-check is not worth the IT costs associated with automation.
31
see section 2.2.2 for the definition of "direct" and "indirect" movements
32
The person lodging the customs export declaration
33
For instance, that the excise movement related to the export declaration is in state "being exported" and the end
date of the SEED number has not expired
29
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check, which, in addition to the above, would also verify on a per-export-declaration basis
that the goods descriptions in the export declaration and in the excise e-AD are consistent.
The consequences of a mismatch, such as encouraging the export declarant to correct
mistakes (if any), refusing the export release or claiming excise duty, would be up to each
Member State according to their national policy and risk analysis.
5.1.3.
Option 3: Automated process synchronisation
This policy option automates the synchronisation of the movements' status between excise
and customs IT systems
34
, which aims at reducing the administrative burden of movements'
manual closures, as well as the duration of an excise movement with export.
This automated synchronisation would automatically close EMCS movements (and release
the excise guarantee) when positive exit results are provided by the Customs Office of Exit. It
would also allow to take EMCS corrective action (e.g. change of destination) when the export
declaration is invalidated or is never lodged.
This option would be mandatory for indirect
31
movements of excise goods with destination
export and recommended for direct movements.
5.1.4.
Option 4: EU common list of Alternate Proofs of Exit
This policy option would legally establish a common list of documents that would be
accepted as an alternate proof of exit of goods by the national excise authorities. Given the
high fiscal risk related to excise goods, this list would be a subset of the one accepted by the
Customs authorities (see UCC Implementing Act
(EU) 2015/2447
Article 335(4)).
5.2.
Excise
–
Customs interactions: Export followed by Transit or using STC
The following policy options are envisaged:
Option 1: Do nothing (baseline)
Option 2: Authorise the use of external transit after the export procedure for Union
excise goods
5.2.1.
Option 1: Do nothing (baseline)
This policy option leaves the current situation as-is.
5.2.2.
Option 2: Authorise the use of external transit after the export procedure for excise
Union goods
This policy option allows economic operators to use a simplified way to export excise goods
by using the external transit procedure after export instead of using EMCS until the external
border. This policy option would provide adequate guarantee management and would prevent
goods from disappearing at destination, as the goods, which have become non-Union goods
with the start of external transit, would be under customs supervision until the goods exit the
customs territory. The transit guarantee covers the excise debt under Article 226(1) (b) of
Regulation (EU) n° 952/2013. However, this option would imply an amendment to Article
189 of Commission Delegated Regulation (EU) 2015/2446 in order to include the possibility
34
EMCS (see section
Error! Reference source not found.)
for excise and AES (Automated Export System) for
customs
30
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to place Union excise goods under external transit. Articles 4(6), 17(1)(a)(iii), 20(2) and 25(1)
of Directive 2008/118/EC would need to be amended in order to allow the use of external
transit instead of EMCS to move the goods until the external border.
5.2.3.
Discarded options
Internal transit and the Single Transport contract (STC) do not present an option because they
are inherently too risky. Whereas economic operators may use external transit, internal transit
and STC after the export procedure to take the goods out of the customs territory of the Union
under Article 329(5)-(7) or Reg. (EU) n° 2015/2447, only external transit would be
considered a fiscally safe solution for excise goods.
Goods placed under internal transit, in accordance with Article 329(6) of Regulation (EU) n°
2015/2447, do not have this fiscal security. The excise guarantee would be released at the start
of transit by the Office of Exit which is at the same time the Office of Departure for transit
and not when the goods leave the EU. Goods remain Union goods. Where the internal transit
procedure ends in the customs territory of the Union, the customs supervision ends and no
physical proof of exit exists. If goods disappear after the end of the transit procedure it will be
difficult to recover the excise debt. Where the internal transit ends in a common transit
country the New Computerized Transit System (NCTS) confirms arrival in that country, but
exit is certified at the start of transit by the office of exit which is at the same time the office
of departure for transit.
For goods placed under STC, in accordance with Article 329(7) of Regulation (EU) n°
2015/2447, the excise guarantee would be released when the goods are taken over under this
contract because this is the moment when exit is confirmed. The goods would move through
the EU without customs supervision and no customs guarantee. Since it is a multimodal
contract, it is even common that modes of transport change whilst the goods transit several
Member States before leaving the EU. If goods disappear before they leave the EU it will be
difficult to recover the excise debt.
Excise goods placed under external transit, where authorised by customs law, would become
non Union goods and would be under customs supervision. The customs guarantee ensures as
well the excise duties.
Changing the general rules for the use of internal transit and STC after export only for excise
goods in order to render these procedures fiscally safe would be unproportioned.
However, in order to allow the use of external transit after export for excise goods only one
Article in the customs legislation (Article 189 of Regulation (EC) n° 2015/2448) needs to be
modified. A legal proposal to change this article is currently in Inter-service Consultation at
the Commission.
5.3.
Excise
–
Customs interactions: Import
The following policy options are envisaged:
Option 1: Do nothing (baseline)
Option 2: Data cross-check
5.3.1.
Option 1: Do nothing (baseline)
This policy option leaves the current situation as-is.
31
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5.3.2.
Option 2: Data cross-check
In order to help reduce fraud, this policy option envisages the mandatory addition of a few
data items (SEED numbers and ARC) at import and to systematically cross-check some data
between the customs import declarations and the excise e-AD. Three types of cross-checks
are being considered.
The first, an data cross-check, would require SEED numbers of the consignor and of the
consignee
35
to be included in the import declaration and would cross-check their existence
and validity automatically on a per-import-declaration basis.
The second data cross check is in addition to the one above, would require the EMCS
movement's Administrative Reference Code (ARC) to be included in the import declaration
and would cross-check its existence and validity automatically on a per-import-declaration
basis; this requires new interactions between the national import system and the national
excise application of EMCS.
The third and most advanced data cross-check, in addition to the two above, would also
verify, on a per-import-declaration basis, that the goods description in the import declaration
and in the excise e-AD is consistent.
The data cross-checks may be automated or manual, up to each Member State's decision
36
.
This policy option would also establish common requirements for moving excise goods under
duty suspension after import; these requirements would be similar to the ones used for
importing goods under VAT exemption
37
.
SEED (EO allowed to store
or move excise goods
under duty suspension)
a) SEED numbers
e-AD
cross-check
1) Goods moved to another MS
MS of
Dispatch
Excise supervision
MS of
Destination
b) a + ARC
(requires import
–
excise processes interactions)
(more complex data cross-check)
c) b + goods description
Import
declaration
Customs supervision
Office of
Entry
Release for free circulation
exempted from excise duty
EU VAT-like common requirements
35
The consignor and consignee are the Economic Operators which, after import, dispatch and receive excise
goods respectively.
36
For instance, Member States with a low volume of movements of excise goods after import may assess that the
automation of data cross-check is not worth the IT implementation and recurring costs.
37
Directive
2006/112/EC
(the " VAT directive") article 143 (2) specifies that the following information must be
provided for VAT exemption at import: VAT identification numbers of the person liable for VAT at the MS of
Importation and of the customer as well as an evidence of transport or dispatch to another Member State
(
Member States may provide that the latter be indicated to the competent authorities only upon request
).
32
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5.4.
Duty Paid Business-to-Business
The following policy options are envisaged:
Option 1: Do nothing (baseline)
Option 2: Registration of Economic Operators
Option 3: Automation of Duty Paid B2B processes by extending EMCS
5.4.1.
Option 1: Do nothing (baseline)
This policy option leaves the current situation as-is.
5.4.2.
Option 2: Registration of Economic Operators
Under this policy option the duty paid B2B economic operators will be registered in a central
register. The registration of the duty paid B2B movement will be available via extension of
SEED
–
System for the Exchange of Excise Data currently used for the registration and
authorisation data of duty suspension movements, by adding new economic operators
involved in a duty paid procedure. It is assumed that the registration process will be lighter,
such as a VAT-number-based registration. It will be the responsibility of the Member State
Administration to register in the central register all traders that, after the fulfilment of
necessary conditions, are allowed to use duty paid B2B procedures. The creation of a
common registration system will allow Member States other than the Member State of
Registration to check information about the economic operator in question and therefore
facilitate controls and administrative cooperation. In an automated environment the
registration number is necessary to identify the economic operator in the computerised system
unambiguously.
5.4.3.
Option 3: Automation of Duty Paid B2B processes by extending EMCS
This option, in addition to the previous one (registration of economic operators in a central
register), would automate the B2B duty paid procedures, EU-wide. In other words, the current
paper-based procedures would be replaced by computer-based ones, by extending EMCS to
B2B duty paid movements, processes, data and rules. More specifically, to enable the proper
operation of the enhancement EMCS, SEED must contain the information about duty paid
B2B Economic Operators.
5.5.
Exceptional Situations
The following policy options are envisaged:
Option 1: Do nothing (baseline)
Option 2: Specify a common approach supported by legislation and guidelines
5.5.1.
Option 1: Do nothing (baseline)
This policy option leaves the current situation as-is.
A number of issues regarding exceptional situations (estimated to occur during approximately
4.6% excise movements) currently exist, causing increased risk of fraud, administrative
burden for Member States, and uncertainty and risk of penalties (as well as certain
administrative costs) for the Economic Operators.
33
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Finally, related to the issue of exceptional situations is the uncertainty regarding the
processing of recovering duties from an Economic Operator residing in another Member
State. This was considered a problem by a number of Member States, although they were not
able to provide any numerical values regarding the costs borne.
5.5.2.
Option 2: Specify a common approach supported by legislation and guidelines
Description
This policy option is a set of changes, which would
enhance the current excise IT systems and support them with a more detailed legal base via
amendments to Directive 2008/118/EC or to implementing regulations; or
provide guidance and better inform Member States and economic operators of the existing
EU legislation on metrology.
Quantitative assessment for shortages and excesses: the Commission would provide
information on the applicability of EU metrology directives and of the necessity of using
certified equipment when measuring quantities of excise goods: the metrology directives are
there to ensure quantities are measured in a common way in all Member States and are
already in force; consequently there is no need for any legislation action.
Introduction of compulsory reports in case of destructions, losses, and/or thefts during
movements: this option would require Economic Operators to inform their national excise
authorities when such an event occurs; it would make a contribution towards the fight against
fraud.
Allowable losses: a set of standardised allowable loss thresholds would be developed for each
type of excisable good. The rules would recognise that different tolerance thresholds may be
needed not only depending on the nature of the good itself, but also on the way in which it is
moved as well as atmospheric conditions in the country/countries at the time when the goods
in question are under transport (e.g. humidity and air temperature)
38
.
Right to be heard:
the concept of the ‘Right to be Heard’, similar to the one written into the
Union Customs Code
39
, would be introduced in Directive 2008/118/EC. The Union Customs
Code (Art. 22(6)), Delegated Regulation (EU) 2015/2446 (Articles 8 and 10) and
Implementing Regulation (EU) 2015/2447 (Articles 8 and 9) state that a person (or an
economic operator) has a right to be heard whenever customs authorities “intend to take a
decision—following an application or not—that would adversely affect the person to whom
the decision is addressed” and establishes time limits and exemptions from the requirement,
and the procedures to be followed in implementing this requirement. There is currently no
equivalent in the Directive 2008/118/EC. Most importantly, the ease of making representation
or challenging adverse decisions in the field of excise seems to vary greatly between
individual national jurisdictions. The introduction of a common “right to be heard” in cases of
suspected shortages or excesses, uniform across the EU, was, therefore, suggested to reduce
uncertainty for economic operators and administrative burdens for Member States. In terms of
benefits expected from the introduction of the standard right to be heard, EOs mentioned
“consistency across MS when dealing with intra-EU movements”, legal certainty,
transparency, and uniformity of legal procedures throughout the EU, more opportunities to
explain themselves in case of a dispute, and decreased administrative burden.
38
An empowerment would be introduced in the revised Directive, authorising the definition of thresholds in an
implementing regulation, and the basis for such calculations
39
(EU) 952/2013 article 22(6)
34
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1900876_0036.png
Enhanced EMCS procedures to support the right to be heard: as part of the implementation of
the right to be heard the current processes in the excise IT systems would be enhanced and
given a legal base by the above. EMCS currently provides optional support for
communication with economic operators about discrepancies reported on the receipt of excise
goods. An implementing or delegated provision, based on Directive 2008/118/EC, would
support the exchange of data relevant to exceptions between concerned Member States and
economic operators, thereby supporting the right to be heard. It would also provide a basis for
collecting agreed data relevant to potential claims, which could also be used as information
for notification and recovery instruments under the Recovery Directive.
40
40
The level of recourse to the Recovery Directive varies between Member States, partly because of differing
national practices concerning guarantee management. Some Member States will immobilise part of a guarantee
until any discrepancies and potential claims that arise from them are resolved. Others treat guarantees as a
source of payment of last resort where requests for payments have been unsuccessful. Since practice varies so
widely, it was decided to restrict the policy option to harmonising claim information, which could then be used
for requests for payment and for potential claims under the Recovery Directory.
35
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6.
6.1.
W
HAT ARE THE IMPACTS OF THE DIFFERENT POLICY OPTIONS
Excise
–
Customs interactions: Export
Do nothing (baseline)
6.1.1.
Over the next five years both Member States and Economic Operators expect a total increase
of 2% of the number of manually closed excise movements with destination export. The share
of manually closed movements is expected to decrease slightly (from 23% in 2016 to 21% in
2021).
Consequently, the problem will slightly worsen as Member States' administrative costs,
Economic Operators' hassle costs and fraud are expected to increase by 2% in absolute value
over the next five years.
No significant changes in the market structure are envisaged over the next five years.
6.1.2.
Data cross-check
This option would require Economic Operators to provide extra information (references to
excise documents, i.e. ARC for the declaration of the excise movement and SEED numbers
for the authorisations of moving excise goods) in each export declaration. This increases the
compliance costs to an EU-wide amount assessed at 6.61 million over 5 years, i.e. at about
EUR 1.32 million per year. Out of 18 Economic Operators in the targeted stakeholders'
consultation that replied to the question, 18 and 9 considered a data cross check of references
and of goods desription should be introduced respectively. In the Open Public Consultation,
68% of the respondents who provided an anwer considered data cross-check useful or very
useful.
This option would also require an evolution of Member States customs and excise IT systems
to implement the data cross-checks, which increases their enforcement costs. Based on an
analysis of impacted IT tasks and messages (see Annex IV) and on replies from three Member
States in the stakeholders' consultation, the total cost of the IT systems over five years is
assessed EU-wide at EUR 8.68 and 33.6 million for the checking of references (ARC and
SEED numbers) and of goods description respectively.
On the other hand, extrapolating EU-wide the replies from five Member States in the
stakeholders' consultation, the automation of data cross-checks would reduce the customs
authorities' administrative costs by EUR 725,000 per year.
As highlighted by Member States replies to the stakeholders' consultation, data cross-checks
would help reduce fraud, with the more advanced cross-check having a more positive impact
on fraud reduction. This impact is difficult to quantify however as very few MS provided an
opinion
41
. Out of 18 Member States that replied to the question, 17 and 15 considered a data
cross check of references and of goods desription should be introduced respectively.
This option is not expected to have any impact on the market or on SMEs, as most Economic
Operators involved in export are large companies.
Even though they may vary significantly depending on each member State's IT architecture,
legacy systems, etc. the enforcement costs are still quite uniformly distributed among Member
States as the requirements and IT implementation effort are similar. However, the benefits
41
One MS stated it could decrease fraud by 50% and two other MS that it would definitely have a positive
impact
36
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will be higher for Member States with high excise duty rates (i.e. which have a higher risk of
excise fraud) or a high volume of movements.
6.1.3.
Automated process synchronisation
This option requires an evolution of Member States' customs and excise IT systems to
synchronise processes between excise and export applications, which increases their
enforcement costs. Based on an analysis of impacted IT tasks and messages (see Annex IV),
the total cost of the IT systems over five years is assessed EU-wide at EUR 67.2 million. This
high cost is due to a quite high number of IT processes, tasks and messages that have to be
modified on both excise and export IT systems.
It reduces administrative costs for Member States and hassle costs for Economic Operators.
Extrapolating the replies in the stakeholders' consultation, the yearly cost savings are assessed
EU-wide at EUR 2.64 million for Member States and EUR 2.57 million for Economic
Operators.
This option is not expected to have any impact on the market or on SMEs.
The enforcement costs are distributed quite uniformly among Member States as the
requirements and IT implementation effort are similar. However, the benefits will be higher
for Member States with a high volume of movements.
It must be noted that the automated synchronisation of the excise and export processes brings
benefits only if exit results are sent by the Office of Exit, which is not at all the case
currently
42
. Otherwise, both export and excise procedures will remain open anyway, waiting
for the exit of the goods to be notified.
Out of 17 Member States and 21 Economic Operators in the targeted stakeholders'
consultation, 16 and 21 respectively considered the automation of process synchronisation
should be introduced.
6.1.4.
EU common list of Alternate Proofs of Exit
This option has a negligible cost and provides great benefits by reducing legal uncertainty and
process complexity, for Economic Operators and Member States alike. Based on the replies
from the stakeholders' consultation, the administrative cost savings for Member States is
assessed EU-wide at about EUR 870,000 per year and the compliance cost savings for
Economic Operators at EUR 1.31 million per year. For the latter this represents a cost saving
of about EUR 4.9 per movement.
This option might have a slightly positive impact on SMEs and on the market by reducing the
learning curve on documents to be accepted across the EU and consequently making the
processing of manually closed excise movements easier and faster.
Out of 19 Member States and 23 Economic Operators in the targeted stakeholders'
consultation, 16 and 20 respectively considered a common list of Alternate Proofs of Exit
should be introduced.
42
Currently, almost all excise movements that are closed manually are closed so because exit results are not
submitted (see section 2.2).
37
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6.2.
6.2.1.
Excise
–
Customs interactions: Export followed by Transit or using STC
Do nothing (baseline)
Financial impact:
- Administrative costs for Member States' administrations (+13.1% in absolute
terms over 5 years):
Administrative costs will grow in line with the number of movements. The
number of external transit movements is expected to increase by 28.9%, internal
transit to decrease by 7% and STC movements will stay roughly unchanged.
- Enforcement costs for Member States' administrations (0):
No substantial enforcement costs are envisaged.
- Administrative, compliance and hassle costs for economic operators (+13.1% in
absolute terms over 5 years):
Costs borne by economic operators will grow proportionally with the number of
movements. The number of external transit movements is expected to increase by
28.9%, internal transit to decrease by 7%, whereas the number of STC movements
will stay roughly unchanged.
- Impact on fraud (0):
If internal and external transit and STC continue to be used after export, fraudsters
will continue abusing the system. Using STC in Member States where guarantees
were not lodged for STC may cost Member States EUR 21 million per year.
- Market effects on SMEs Efficiency (0):
No changes in the market structure over the next five years are envisaged.
Impact of missing legal alignment of excise and customs legislation:
Some Member States would continue to allow the use of external and/or internal
transit and/or STC without having a legal base in excise law, others would not. The
"do nothing" option would contribute to the lack of legal and procedural certainty for
Economic Operators.
6.2.2.
Authorise the use of external transit after the export procedure for excise Union
goods
Financial impact
- Administrative costs for Member States' administrations (+14, 2% in absolute
terms over 5 years):
Administrative costs will grow in line with the number of movements (the
administrative costs being similar for internal and external transit and STC). The
number of external transit movements is expected to be 14.2% higher than the
number of internal and external transit and STC today.
- Enforcement costs for Member States' administrations (0):
No substantial enforcement costs are envisaged. Directive 2008/118/EC and its
implementing regulations and in the UCC/IA and UCC/DA need to be modified.
38
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No changes in the existing excise and transit systems, are needed. However the
prohibition of the use of internal transit and STC for excise goods need to be
reflected in the national export systems; no data is available and it is expected to
lead to very limited costs.
- Administrative, compliance and hassle costs for economic operators (+):
In general, the costs borne by economic operators will grow proportionally with
the number of movements. The number of external transit movements is expected
to be 14.2% higher than the number of internal and external transit and STC
today. However, due to increased legal certainty, hassle costs will go down, and
so will be the per movement burden on economic operators. For Economic
Operators this option would not entail learning costs since most of them, also the
ones using internal transit and STC, use external transit already.
- Impact on fraud (++):
Covering with sufficient guarantee all movements with destination export will
substantially reduce fraud especially in Member States, where guarantees are not
lodged for STC. Compared with dynamic baseline scenario, gains of EUR 21
million per year could be envisaged. Since there are no large enforcement cost
envisaged, eliminating fraud by the analyzed policy option would be cost-
effective.
- Market effects on SMEs Efficiency (0):
No direct impact envisaged. Indirect impact on market price through fraud
reduction could be expected.
Impact of legal alignment of excise and customs legislation by allowing the use of
export followed by external transit
The possibility to use external transit instead of EMCS will facilitate trade whilst
securing the excise debt. Currently already 14% of all exports are carried out by
using external transit.
Customs legislation, i.e. Article 189 UCC/DA, has to be modified in order to allow
excise Union goods to be placed under external transit.
Excise legislation, i.e. Articles 4(6), 17(1)(a)(iii), 20(2) and 25(1) has to be modified
in order to allow the use of external transit at export, to allow for the office of exit to
become an excise destination and in order to convey the responsibility to secure the
excise debt to the external transit procedure.
The alignment of the two legislations would create legal certainty for the traders. It
would as well allow for uniform application of law.
The option would constitute a choice. The Economic Operators would be able to
chose between the use of export followed by external transit and the normal export
procedure without the use of external transit.
39
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6.3.
6.3.1.
Excise
–
Customs interactions: Import
Do nothing (baseline)
The number of movements of excise goods under duty suspension after import is expected to
increase by 4% from 2016 to 2021 and their share in all imports to increase from 8.3% to 9%
(see section 2.2).
Consequently, the problem will slightly worsen as Member States' administrative costs,
Economic Operators' hassle costs and fraud are expected to increase over the next five years
in the same proportion as the number of movements.
No changes in the market structure are envisaged over the next five years.
6.3.2.
Data cross-check
This option would require Economic Operators to provide extra information (references to
excise documents, i.e. ARC for the declaration of the excise movement and SEED numbers
for the authorisations of moving excise goods) in each import declaration. Based on the
replies to the stakeholders' consultation, this increases the compliance costs to an EU-wide
amount assessed at EUR 260,000 per year. It is assumed that the compliance costs for
providing only SEED numbers would be half of it, i.e. EUR 130,000 per year. Out of 16
Economic Operators that replied to the question, 14, 13 and 4 considered a data cross check of
SEED numbers, of ARC and of goods desription should be introduced respectively.
Though it is expected that common EU requirements on moving excise goods under duty
suspension after import would reduce hassle costs of Economic Operators by reducing the
complexity of provisions across different Member States, no specific data is available on the
amount of such hassle cost savings.
This option would also require an evolution of Member States customs and excise IT systems
to implement the data cross-checks, which increases their enforcement costs. Based on an
analysis of impacted IT tasks and messages (see ANNEX IV), the total cost of the IT systems
over five years is assessed EU-wide at EUR 6.8, 9.6 and 12 million for the checking of SEED
numbers, of ARC and of goods description respectively. Replies from the only two Member
States that provided a quantified cost assessment in the stakeholders' consultation were both
below these figures, which suggests that they are upper bonds.
As highlighted by Member States replies to the stakeholders' consultation, data cross-checks
would help reduce fraud, with the most advanced cross-check having a more positive impact
on fraud reduction. This impact is difficult to quantify however as very few MS provided an
opinion
43
. According to Member States' replies to the stakeholdeholders' consultation, the
"medium" cross-check (SEED numbers and ARC) would not reduce fraud compared to cross-
checking only SEED numbers. Out of 18 Member States, 18, 17 and 13 considered a data
cross check of SEED numbers, of ARC and of goods desription should be introduced
respectively.
This option is not expected to have any impact on the market or on SMEs, as most Economic
Operators involved in import are large companies.
43
One Member State stated it could decrease fraud by 50% and two other Member States that it would definitely
have a positive impact.
40
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Even though they may vary significantly depending on each member State's IT architecture,
legacy systems, etc. the enforcement costs are still quite uniformly distributed among Member
States as the requirements and IT implementation effort are similar. However, the benefits
will be higher for Member States with high excise duty rates (i.e. which have a higher risk of
excise fraud) or a high volume of movements of excise goods under duty suspension after
import.
6.4.
6.4.1.
Duty Paid Business-to-Business
Do nothing (baseline)
From the stakeholders' consultation (see [R5]), the number of duty paid B2B movements is
expected to grow by about 6% over the next five years. The current issues (e.g. regulatory
burden) are assumed to grow in the same proportion.
If the B2B duty paid procedure is not automated, the B2B duty paid movements will continue
to be covered by the existing paper-based system meaning that the movements of excise
goods will continue to be accompanied by multiple copies of the SAAD (defined in the
Commission Regulation (EC) No 3649/92). This would mean that none of the existing
problem will be resolved. The complicated and non-harmonized paper-based procedure will
continue to be used. The usage of that procedure will not allow access to movements detailed
and information about the economic operators taking part in duty paid movements. It will not
be possible to have a real time monitoring or control of those movements by the Member
State Administrations. Economic operators will struggle with high administrative burden and
costs associated with the procedure (e.g. preparation of SAAD) and suffer from frequent
delays in the release of guarantees as well as in the refund process. The current duty paid
procedure presents limited capacity to perform risk analysis necessary to prevent fraudulent
abuse of the paper-based procedure.
Consequently, the problem will slightly worsen as Member States' administrative costs,
Economic Operators' hassle costs and fraud are expected to increase over the next five years
in the same proportion as the number of movements.
No changes in the market structure are envisaged over the next five years.
6.4.2.
Registration of Economic Operators
This option increases enforcement costs for both Member States as it requires some IT
investment and yearly operations (SEED extension), which is assessed at EUR 1.2 million and
EUR 240,000 respectively.
It also increases administrative costs for Member States and compliance costs for Economic
Operators in order to perform the registration themselves (provide information and
documents, process applications, etc.). The first registration of economic operators would cost
Member States EUR 2.4 million, assuming that it will occur in the first year of the
implementation of the system. Yearly administrative cost of renewing these registrations
would amount to EUR 0.5 million. The compliance costs for Economic Operators are
assessed at EUR 7.20 and 1.44 million for the first-time registrations and yearly renewals
respectively.
The investments costs and yearly operating expenses are assessed at EUR 1.2 million and
EUR 0.24 million respectively. The enforcement costs for Member States is deduced from the
stakeholders' consultation and from an IT cost assessment (seeAnnex IV). The compliance
41
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costs for Economic Operators is assumed to be half of the one for duty suspension (see
evaluation report [R1]) as the duty paid B2B registration procedures are expected to be much
simpler; this leads to an effort of 6 and 1 man*days to get a first-time registration and a yearly
renewal respectively.
It should have a positive impact on the fight against fraud, as registrations and authorisations
always do (however difficult to quantify).
The registration and electronic storage by Member States of certain information regarding
economic operators dealing with duty paid B2B movements will be indispensable for the
proper function of excise duty system and the fight against fraud. At the moment there is a
lack of data concerning duty paid movements and traders dealing with those operations. The
movements are covered by paper documents exchanged between traders; often without any
intervention of Member State administration.
The registration will ensure storage of up to date accurate data about these economic
operators. In case of any irregularities it will allow a rapid exchange of those data between
Member States and automated access to information. Making use of the information contained
in registers, through a risk analysis, will result in better detection of suspicious movements
and hence in reduction of fraud.
This option does not provide direct benefits to the Economic Operators. So, it is expected to
have a slightly negative impact on the market and in particular on SMEs as the latter are
relatively more sensitive to compliance costs.
6.4.3.
Automation of Duty Paid B2B processes by extending EMCS
This option requires significantly higher IT investment from Member States, which leads to
higher enforcement costs too; initial investment and yearly operating expenses are assessed
EU-wide at EUR 7.5 and 1.5 million respectively. The enforcement costs for Member States
are deducted from the stakeholders' consultation.
Economic Operators will update their own IT systems if they deem worth it; otherwise they
will fill in on-line forms provided by Member States. Based on the replies to the stakeholders'
consultation, the regulatory costs for Economic Operators are assessed EU-wide at EUR
14.50 and 2.90 million for initial one-off costs and for yearly operations respectively.
This option also reduces administrative burden for both Member States and Economic
Operators (productivity gains, faster processing, guarantee release and refund). Extrapolated
from the replies to the stakeholders' consultation, the yearly cost savings are assessed EU-
wide at EUR 5.8 and 12.20 million for Member States and Economic Operators respectively.
This option will have a definitely positive impact on the fight against fraud as the monitoring
of movements would be much more efficient. This is however difficult to quantify.
Based on the stakeholders' consultation, the benefits/costs ratio is expected to be more than
twice higher for SMEs than for large companies, likely because their structure is more
adaptable to changes in procedures or in IT systems.
Even though they may vary significantly depending on each member State's IT architecture,
legacy systems, etc. the enforcement costs are still quite uniformly distributed among Member
States as the requirements and IT implementation effort are similar. However, the benefits
will be higher for Member States with high excise duty rates (i.e. which have a higher risk of
excise fraud) or a high volume of duty paid business-to-business movements.
42
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Out of 19 Member States and 24 Economic Operators that provided an opinion in the targeted
stakeholders' consultation, 18 and 21 respectively considered the automation of duty paid
B2B procedures should be introduced. From the Open Public Consultation, 87% of
respondent Economic Operators and Trade Associations considered this option useful or very
useful.
6.5.
6.5.1.
Exceptional Situations
Do nothing (baseline)
Doing nothing will cost economic operators EUR 13.49 million and Administrations EUR
8.13 million additional costs over the next 5 years if nothing is changed
No obligation on economic operators to report destructions, losses, and/or thefts during
movements or to add storage capacity of a tax warehouse would generate no new costs or
benefits either for Economic Operators or for Member States, and would leave related fraud
unaffected. Lack of standardization of procedures and equipment used in order to
estimate/calculate shortages/excesses in turn, apart from causing uncertainty for Economic
Operators, will cost Member States ca. EUR 7.64 million over the course of the next five
years. Nonexistence of standard allowable losses threshold, again causing uncertainty to
Economic Operators, also costs Member States an estimated EUR 0.29 million annually. Lack
of a standard right to be heard in turn, considered to be at least to some extent burdensome by
80% of Economic Operators, generates cost of approximately EUR 13.5 million annually.
No changes in the level of fraud or in the market structure are envisaged over the next five
years.
6.5.2.
Specify a common approach supported by legislation and guidelines
This option is not expected to have any significant impact on the market or on SMEs.
Quantity assessment for shortages and excesses: the legal requirement to follow the EU
metrology
acquis,
particularly the use of certified measuring equipment, and their use would
be encouraged through guidance and workshops. Metrology directives ensure quantities are
measured in a common way in all Member States and are already in force; consequently there
is no need for any legislation amendment but only to make national authorities involved in
excise procedures more aware of these directives.
The standardization of procedures and equipment used to estimate/calculate
shortages/excesses is supported by both Member States (69%) and Economic Operators
(76%)–is expected to generate benefits of approximately EUR 17.2 million in lower
administrative costs for Member States and approximately EUR 93 million for Economic
Operators in forgone administrative, compliance and hassle costs. Additionally, the
introduction of this policy option has a potential to moderately reduce the risk of fraud for
Member States. The benefit of this option would outweigh its costs within one year of its
implementation.
Introduction of compulsory reports in case of destructions, losses, and/or thefts during
movements would generate a cost of approximately EUR 35 million for EOs over 5 years. At
the same time, MSAs believed it had a potential to moderately limit the risk of fraud.
Unsurprisingly, then, this policy option was more popular among the latter (66.6%) than the
former (45%). It is difficult to evaluate benefits to the MS in terms of scale of the fraud
43
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reduction so it is difficult to assess whether (and when) the costs borne by the EOs would be
offset by fraud reduction.
Allowable losses: standardized allowable losses thresholds (tolerance thresholds) would be
introduced and their values defined in the legislation. 83.3% of Member States expect this
would not only significantly reduce risk of fraud, but also result in lowering Member States’
administrative costs. Basing on per diem rates in each Member State, and data provided by the
stakeholders' consultation, using the same method as in case of the cost of the lack of unified
tolerance threshold, it is estimated that the EU-wide gain from the introduction of the
tolerance threshold at approximately EUR 11.7 million over the next five years. 86.4% of
Economic Operators expect significant regulatory cost savings but the latter could not be
quantified.
Right to be heard:
the concept of the ‘Right to be Heard,’ similar to the one written into the
Union Customs Code, would be introduced in Directive 2008/118/EC. Introduction of a
standard right to be heard was supported by the vast majority of both Member States (80%)
and Economic Operators (100%), although a number of the former believe their existing
national legal systems provide Economic Operators with sufficient opportunity to defend
themselves. The annual administrative costs of introduction of a standard legal right to be
heard for Member States would amount to roughly EUR 0.36 million. The current situation is
assessed to cost Economic Operators EUR 67 million in the next five years; though the cost
savings due to the introduction of a standard right to be heard could not be quantified, it is
expected to be very significant.
Enhanced procedures to support a right to be heard: limited evidence (an extrapolated
estimate from one Member State) indicates moderate enforcement costs for this option, but an
administrative cost saving of approximately EUR 5.23 million over the next five years if all
Member States implemented the current optional processes in the excise IT systems for
optional support for communication with Economic Operators about discrepancies reported
on the receipt of excise goods. A legal base would facilitate the exchange of data relevant to
exceptions between concerned Member States and economic operators and would provide a
means for exchanging and collecting data to support for the Right to be Heard. It would also
be relevant to the collection of potential claims under the Recovery Directive.
44
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7.
H
OW DO THE OPTIONS COMPARE
All figures in the comparison tables of this chapter are relative to the "Do nothing" (dynamic
baseline) option.
When quantified, costs and benefits are expressed in million euros (M€). Costs are split into
the initial one-off costs and yearly recurring costs. To illustrate better what a given policy
option would bring (positively or negatively), the comparison tables also provide costs and
benefits over five years, which sum the initial one-off costs (where applicable) and the costs
& benefits of the first five years of operations.
Negative figures are highlighted in
red
characters and represent costs or a negative impact.
Positive figures are highlighted in
green
characters and represent benefits, costs savings or a
positive impact.
45
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7.1.
Excise
–
Customs interactions: Export
The table here below summarises the impact presented in section 6.1.
Do
nothing
Data cross-check
ARC and SEED numbers
Goods description
Initial
one-off
costs
Yearly
recurring
cost/benefit
5 years
Initial
one-off
costs
Yearly
recurring
cost/benefit
5 years
Automated Process
Synchronisation
Initial
one-off
costs
Yearly
recurring
cost/benefit
5 years
EU common list of Alternate
Proofs of Exit
Initial one-
off costs
Yearly
recurring
cost/benefit
5 years
MS administrative costs &
enefits M€
MS enforcement costs &
enefits M€
EO regulatory costs &
enefits M€
Impact on fraud
Impact on market and SME
Efficiency
Effectiveness
5 years:
+2%
0
5 years:
+2%
0
0
0
0
0
-4.34
0
0.77
-0.87
-1.32
+
0
+
+
3.84
-8.68
-6.61
0
-16.80
0
0.77
-3.36
-1.32
++
0
-
++
3.84
-33.60
-6.61
0
-33.60
0
2.69
-6.72
1.46
0
+
--
13.44
-67.20
7.30
0
0
0
0
+
++
++
0.88
0.00
1.33
4.39
0.00
6.66
+++ if if exit results are sent by
the Office of Exit; 0 otherwise
44
Quite expectedly, the more advanced data cross-check is more costly and provide more benefits to the fight against fraud. The regulatory costs to
Economic Operators for providing extra excise information in the export declarations are limited and would be compensated by the introduction of an EU
common list of alternate proofs of exit. However, the enforcement costs for Member States (mostly IT systems) are high for the cross-check of the goods
description and very high for the automated process synchronisation. The latter is significantly higher than the benefits it would bring to all stakeholders.
The EU common list of alternate proofs of exit has negligle regulatory costs and provide substantial benefits to all stakeholders.
44
the automated process synchronisation would be efficient only if exit results are sent by the Office of Exit, which is not at all the case currently (see section 6.1.3). In other words, the
benefits of an automated excise-export process synchronisation would appear only if customs officers would send many more exit results than currently; measures to be taken to
increase the ratio of exit results is entirely in the customs export area and consequently outside the scope of this excise initiative.
46
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7.2.
Excise
–
Customs interactions: Export followed by Transit or using STC
The table here below summarises the impact presented in section 7.2.2.
Do nothing
Allow the use of external
transit
after
export
instead of EMCS
+14,2%
0
+
MS administrative costs & +14,2%
benefits over 5 years
MS enforcement costs
0
Administrative compliance +14,2%
and hassle costs for
economic operators over 5
years
Impact on fraud
Impact on market and SME
Efficiency
Effectiveness
0
0
0
0
++
0
0
++
The above shows that the option of using external transit after export instead of EMCS
until the external border ("no nothing") is cost neutral and has a better impact on fraud.
Compared to the "do nothing" option the use of external transit after export instead of
EMCS would facilitate trade because it would be possible for traders to regroup a
number of export movements at the place where the office of exit is located inside the
customs territory and then dispatch the goods from the office of exit, which would be at
the same time the office of departure for transit, to the external border, from where they
would physically exit. Until the goods physically exit they are under customs
supervision because the goods become non-Union goods when placed under external
transit. This would even bear the advantage that the guarantor will be the declarant of the
transit procedure who is much closer to the goods in question than the registered
consignor or authorised warehousekeeper who was the guarantor under EMCS. The use
of the external transit procedure would provide the same fiscal security as the use of
EMCS until the external border under the "do nothing" option.
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7.3.
Excise
–
Customs interactions: Import
The table here below summarises the impact presented in section 6.3.
Data cross-check
Do nothing
Initial
one-off
costs
SEED numbers
Yearly
recurring
cost/benefit
5 years
SEED numbers and ARC
Initial
one-off
costs
Yearly
recurring
cost/benefit
5 years
SEED numbers, ARC and
Goods description
Initial
one-off
costs
Yearly
recurring
cost/benefit
5 years
MS administrative costs &
enefits M€
MS enforcement costs &
enefits M€
EO regulatory osts M€
EO regulatory benefits
Impact on fraud
Impact on market and SME
Efficiency
Effectiveness
costs +4% in
2021 vs 2016
0
costs +4% in
2021 vs 2016
0
0
0
0
n/a
-3.40
n/a
0.29
-0.68
-0.13
+
+
0
+
+
1.44
-6.80
-0.66
n/a
-4.80
n/a
0.29
-0.96
-0.27
+
+
0
-
+
1.44
-9.60
-1.33
n/a
-6.00
n/a
0.29
-1.20
-0.27
+
++
0
-
+
1.44
-12.00
-1.33
Quite expectedly, the most advanced data cross-check is more costly and provide more benefits to the fight against fraud. However cross-checking SEED
numbers and ARC, while significantly more costly, brings limited or no added value compared to cross-checking only SEED numbers.
The regulatory costs to Economic Operators for providing extra excise information in the import declarations are limited and likely partly compensated
by the benefits (hassle cost savings) brought by the common EU requirements for moving excise goods under duty suspension after import.
48
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7.4.
Duty Paid Business-to-Business
The table here below summarises the impact presented in section6.4.
Do nothing
Registration of Economic
Operators
Initial
one-off
costs
Yearly
recurring
costs/benefits
5 years
Automation of Duty Paid B2B
processes by extending EMCS
Initial one-off
costs
Yearly
recurring
costs/benefits
5 years
MS administrative costs
M€
MS administrative benefits
M€
MS enforcement costs &
enefits M€
EO regulatory osts M€
EO regulatory enefits M€
Fraud
Impact on market and SME
Efficiency
Effectiveness
5 years: +6%
-2.39
-0.48
-4.30
-2.39
-0.48
5.8
-4.30
29.00
-15.00
-29.00
61.00
-1.20
5 years: +6%
-7.20
-0.24
-1.44
+
-
+
-
-2.40
-14.40
-7.50
-14.50
0.00
-1.50
-2.90
12.20
++
++
++
++
Though more expensive to implement, in particular in terms of initial one-off costs, the automation of the duty paid B2B processes brings much higher
benefits, in particular for SMEs.
The complete automation of B2B movements compared with one step approach, a registration of traders, will be more costly especially in terms of
investments and regulatory cost for economic operators. However savings will be only achieved in case of automation, by both MS administrations as
well as by economic operators. The current arrangement for B2B movements which are paper based with a poor supervision of movements and operators
create opportunities for fraud in MS with excise rate differentials. The automation would eliminate those loopholes and fraud creating losses.
49
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7.5.
Exceptional Situations
Do nothing
Quantitative assessment for
shortages and excesses
Initial
one-off
costs
Yearly
recurring
costs/benefits
5 years
Compulsory reports in case of
destructions, losses, and/or
thefts during movements
Initial one-off
costs
Yearly
recurring
costs/benefits
5 years
Allowable losses
Initial one-
off costs
Yearly
recurring
costs/benefits
5 years
MS administrative costs &
enefits M€
MS enforcement costs &
enefits M€
EO regulatory costs &
enefits M€
Fraud
Impact on market and SME
Efficiency
Effectiveness
45
0
0
0
3.4
0
18.6
+
0
++
++
17.2
0
93
0
0
0
+
0
+
--
0
0
-7
0
0
-35
0
0
2.34
0
+2
46
0
0
+
+
11.7
0
45
The Member States administrative costs of the current lack of standardisation of procedures and equipment used to calculate shortages or excesses is assessed at 7.64 million euros
over the next five years
46
This impact could not be quantified but is assessed to be significantly positive to Economic Operators.
50
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Do nothing
Initial
one-off
costs
All Measures
Right to be Heard
Yearly
recurring
costs/benefits
5 years
Enhanced Procedures
Initial one-off
costs
Yearly
recurring
costs/benefits
5 years
Initial
one-off
costs
Yearly
recurring
costs/benefits
5 years
MS administrative costs &
enefits M€
MS enforcement costs &
enefits M€
EO regulatory costs &
enefits M€
Fraud
Impact on market and SME
Efficiency
Effectiveness
-0.36
0
43
-1.8
0
0
0
1.04
0
5.2
0
0
6.42
0
11.6
48
32.1
0
58.0
44
0
+2
47
+
++
+
-
0
0
+
+
+
47
If nothing is done, the current lack of Right to be Heard would cost Economic Operators 67 million euros in the next five years. The impact of introducing a Right to be Heard could
not be quantified but is assessed to be significantly positive to Economic Operators and would save a significant amount of the current costs.
48
These figures are lower bonds as some policy options (e.g. Right to be Heard) bring benefits that are not quantified.
51
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8.
8.1.
T
HE PREFERRED OPTION
Excise
–
Customs interactions: Export
Given the high enforcement costs (mostly evolutions of IT systems) and the lack of obvious
return at EU level (in particular due to the scarcity of data on fraud and to the fact that the
benefits are not uniformly distributed across Member States), the data cross-check of goods
description and the automated process synchronisation are deemed too expensive compared to
their benefits to be proposed at EU level.
On the other hand the data cross-check of excise references (SEED numbers and ARC) in
export declarations provides significant benefits to the fight against fraud at a relatively low
cost for Member States and Economic Operators; consequently this option is preferred at EU-
level. Moreover, it will also allow, but not oblige, some Member States to do more (e.g. data
cross-check of goods description and/or automated process synchronisation) should they
assess it worthwhile at national level. To facilitate the task of Member States willing to
implement these options, the Commission will specify detailed recommendations for a
solution.
Given the high administrative benefits and negligible regulatory costs highlighted by all
stakeholders, a legislative measure to specify a common list of documents that shall be
accepted as an alternate proof of exit for excise goods is to be proposed at EU-level.
8.2.
Excise
–
Customs interactions: Export followed by Transit or using STC
The objective of legal clarity and provision of sufficient guarantees for all movements with
destination export would be fully achieved when opting for the possibility to use of external
transit after the export procedure for excise Union goods.
Given the clear benefits for trade to be able to use external transit after export instead of
EMCS and the negligible enforcement costs, this is the preferred option.
8.3.
Excise
–
Customs interactions: Import
Given the high enforcement costs (mostly evolutions of IT systems) and the lack of obvious
return at EU level (in particular due to the scarcity of data on fraud and to the fact that the
benefits are not uniformly distributed across Member States), the data cross-check of goods
description is deemed too expensive compared to their benefits to be proposed at EU level.
On the other hand the data cross-check of excise references (SEED numbers and ARC) in
export declarations provides some benefits to the fight against fraud at a relatively low cost
for Member States and Economic Operators; consequently this option is preferred at EU-
level. Moreover, it will also allow, but not oblige, some Member State to do more (e.g. data
cross-check of goods description) should they assess it worthwhile at national level.
In order to reduce the regulatory costs for Economic Operators and to be consistent with the
VAT approach of the problem (see section 5.3.2 and footnote 33), it is also proposed to allow
Member States to require ARC only upon request.
52
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8.4.
Duty Paid Business-to-Business
An overwhelming number of respondent Member States (18 out of 19) and a large majority of
respondent Economic Operators (21 out of 24) are in favour of an automation of the duty paid
B2B procedures
49
. The quantitative analysis shows also an overall benefit as the
administrative cost savings overweight the enforcements and compliance costs after two years
of operations.
Moreover, the automation is expected to benefit significantly to SMEs. It will reduce
bureaucracy and administrative burden by eliminating paper-based procedure for Member
State and Economic Operators. It may in particular increase competitiveness of SME's.
Immediate and easier acces to online, up-to-date and real time data will enable better visibility
and more efficent follow-up of on-going movements for the Member State administrations
and a better targeting of their controls. It will reduce sensitivity to fraud and fiscal risks.
Consequently the preferred option is the automation of the duty paid B2B procedures.
A drawback is that this preferred option imposes enforcement (IT) costs to some Member
States which will get a limited return due to the low number of duty paid B2B movements in
their country
8.5.
Exceptional Situations
With the exception of the compulsory reporting in case of destructions, losses, and/or thefts
during movements, all other policy options for the handling of exceptional situations show a
strong net positive benefit to both Member States and economic operators
The quantification of shortages and excesses merely requires better application of the existing
acquis and should be covered by guidance and workshops. Standardisation of allowable losses
would be of benefit to both Member States and to economic operators, although the benefits
to economic operators are not quantifiable; this measure calls for a common legislative
proposal.
Whilst the right to be heard may involve a very small cost to Member States the benefits to
economic operators are large. It is therefore recommended to include provisions for this in a
common legislative proposal.
Finally enhanced procedures in EMCS show a small cost reduction for Member States, but
some benefit to economic operators. It is therefore recommended that this option should be
included in the legal base.
8.6.
REFIT (simplification and improved efficiency)
The following table summarises the REFIT cost savings, which are regulatory cost savings for
Member States and Economic Operators.
REFIT Cost Savings (in million euros, per year)
–
Preferred Option(s)
49
This option includes the registration of economic operators, as it is a pre-requisite to automation (see section
5.4.3).
53
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Description
Excise-customs interactions
export data cross-check of
references
export common list of alternate
proofs of exit
import data cross-check
Duty Paid Business-to-Business
automation
Exceptional situations
certified equipment
standardized allowable losses
thresholds
enhanced procedures
TOTAL
Amount for
Member
States
0.77
088
.29
5.80
Amount for
Economic
Operators
0
1.33
.13
12.20
Comments
Productivity gains, faster
processing,
guarantee
immobilised for a shorter
period of time
3.44
2.34
1.04
14.55
18.60
n/a
(1)
0
32.27
(1) significant regulatory cost savings are expected for Economic Operators but limited or no data is available
Cost savings for Member States are mostly administrative ones as the preferred options will
save time and effort spent on disputes, challenges of decisions and processing of documents.
The positive impact on fraud reduction is not included in this table as it could not be
quantified due to the scarcity of available data.
Cost savings for Economic Operators are mostly administrative ones as the preferred options
will save time and effort spent on disputes, challenges of decisions and processing of
documents. The automation of duty paid business-to-business procedures will also reduce
hassle costs by decreasing the time period during which the movement guarantee is
immobilised and by fastening the refund process.
8.7.
Impact on other policies, Coherence and Proportionality
The preferred policy options only enhance existing procedures and are not expected to cause
any significant consumption increase. The Health services of the Member States
administrations were consulted (see Annex II section 2). No social or environmental impact
has been identified for any option.
A few policy options have a positive impact on trade or on SME (e.g. automation of duty paid
B2B). It is not expected however to have macroeconomic impacts on intra-EU trade, exports
or imports, or to drastically improve the competitiveness of SMEs.
All preferred policy options are consistent with customs or VAT policies: data cross-check
aligned with customs data model, alternate proofs of exit similar to customs, export
54
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facilitation by allowing external transit for excise goods, common requirements for duty
exemption at import similar to VAT, right to be heard similar to customs.
All preferred policy options are proportionate as their overall benefits outweigh their costs,
the latter being reasonably low. The set of preferred policy options also reach a right balance
between the fight against fraud and the facilitation of legitimate trade.
8.8.
Stakeholders' opinions on preferred options
The following table summarises the stakeholders' opinion on the preferred options, among the
respondents to the related questions. The percentage indicates the ratio
50
of stakeholders that
consider a given option useful or very useful.
Targeted Consultation
Member
States
Option
Export
Data cross-check of references
Common list of alternate proofs of exit
Export followed by external transit
Import
–
data cross-check of SEED numbers
Duty Paid B2B - automation
Exceptional situations
Assessment for shortages and excesses
Allowable losses
Right to be heard and related procedures
Economic
Operators
Open Public
Consultation
Economic
Operators or
Trade
Associations
68%
n/a
n/a
n/a
87%
84%
n/a
90%
94%
84%
n/a
90%
94%
69%
83%
80%
100%
87%
n/a
87%
87%
76%
86%
100%
50
Each ratio is based on the number of respondents that provided an answer to a given question; in other words,
"no answer" replies are not taken into account for the calculation of the ratio.
55
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9.
9.1.
H
OW WOULD ACTUAL IMPACTS BE MONITORED AND EVALUATED
Monitoring Indicators
The following table below gives an overview of the main policy objectives, the indicators to
measure whether they will be achieved, the tool for measuring these and the operational
objectives.
Specific objectives
(see 4.2)
Indicator
Excise fraud
- number of audits
- number of controls
- reported fraud
- suspected fraud
Measurement tool
EU excise evaluation
study
Operational
objectives
Substantial decrease of
excise fraud at export,
import and duty paid
B2B
Reduce illicit trade,
evasion and abuse
(fraud)
Data and feedback
provided by the Member
States
Enforcement costs
for excise and
customs authorities
Administrative costs
for excise and
customs authorities
EU excise evaluation
study
Data and feedback
provided by the Member
States
EU excise evaluation
study
Data and feedback
provided by the
Economic Operators
(ECG, TCG and
stakeholders'
consultation in
evaluation study)
Regular reports in EMCS
Average duration of
an excise duty paid
B2B movement
EU excise evaluation
study .
Regular reports in
EMCS, AES and NCTS
Data and feedback
provided by the
Economic Operators
and/or the Member
States
Reduction of
administrative costs in
excise-export
51
and duty
paid B2B intra-EU cross-
border procedures.
Reduction of compliance
costs in duty paid B2B
intra-EU cross-border
procedures
Reduction of compliance
costs for the handling of
shortages and excesses
Reduce tax obstacles by
minimising costs for
businesses and
administrations
Establish a clear and
consistent framework for
free movement of the
goods
Compliance costs for
Economic Operators
Size of Economic
Operators that use
excise procedures
Number of
movements of excise
goods
Volume
Reduction of the duration
during which an excise
movement in duty paid
B2B intra-EU cross-
border procedures is
open.
Increase in number of
SMEs and in number of
movements for duty paid
B2B procedures
Increase in number of
movements under
external transit after
export
51
For excise movements with destination export which require an alternate proof of exit
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Specific objectives
(see 4.2)
Indicator
Number of
movements
Measurement tool
Regular reports in EMCS
and SEED
Operational
objectives
Allow the proper
monitoring of
movements of excise
goods
Number of Economic
Operators
Net value of the
goods (€)
Excise duty (€)
Data provided by the
Member States
Analysis of market or
consumption databases
More accurate data for
exports, imports and duty
paid business-to-business
9.2.
Monitoring structures
The Committee on Excise Duty, an advisory committee on excise issues in which
representatives of all Member States participate and which is chaired by Commission officials
from DG TAXUD, will monitor the implementation of the evolutions of Directive
2008/118/EC and discuss and clarify possible interpretation issues between Member States
regarding the new legislation. In case new legislative developments are required, the Indirect
Taxation Expert Group might be further consulted.
9.3.
Evaluation
Member States and the Commission shall examine and evaluate the functioning of the
evolutions provided for in the new legislation. To that purpose, Member States shall
communicate to the Commission any relevant information as regards the level and the
evolution of the administrative costs, excise fraud and number of Economic Operators
authorised to use excise procedures, necessary for the evaluation of the effectiveness,
efficiency, coherence with other interventions with similar objectives, and continued
relevance of the new legislation.
The evaluation should also seek to collect input from all
relevant business stakeholders as regards the level and the evolution of their compliance costs.
The Commission will prepare a retrospective evaluation of the functioning of the new
legislation five years after its entry into force.
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ANNEXES
ANNEX I
1.
Procedural Information
Lead DG, Decide Planning/CWP references
The lead DG is DG TAXUD.
This initiative got the following political agreements:
-
Agenda Planning: General arrangements for excise duty
–
harmonisation and
simplification. (2018/TAXUD/003)
-
Inception Impact Assessment:
General arrangements for excise duty
–
harmonisation and
simplification (Ares(2017)1497481)
-
Commission Work Programme
2017 Annex II
initiative 6
2.
Organisation and timing
The following DG were invited to the Inter-Service Steering Group (ISSG): AGRI, BUDG,
COMP, GROW, MOVE, OLAF, SANTE, SG, SJ, TRADE. DG AGRI and BUDG attendted
the first ISSG meeting. DG OLAF, SANTE, SG, SJ attended all ISSG meetings and involved
themselves in all steps of the Impact Assessment.
An independent contractor (CASE) performed a study contributing to this impact assessment,
which provided most of the data and inputs in this impact assessment report. The final
deliverable of this study is document [R5].
The ISSG reviewed and approved the following documents
-
all ISSG meetings' minutes
-
questionnaires (OPC, Member State, Economic Operator) for the stakeholders' consultation
-
inception report
52
of the independent contractor's study
-
final report of the independent contractor's study
-
Commission's Impact Assessment Report (this document)
Two external economists, proposed by the independent contractor, reviewed the study's draft
final report:
-
Dr A. Renda (Senior Research Fellow at Duke University and an Adjunct Professor of Law
and Economics at Duke School of Law)
-
Dr R. Bird (Professor Emeritus of Economics, Rotman School of Management, and Senior
Fellow of the Institute for Municipal Governance and Finance, Munk School of Global
Affairs, University of Toronto)
52
Intermediate deliverable, describing the problems, options, methodology and approach of the study
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The chronology of the main events is as follow:
16/01/2017 kick-off of the study contributing to the Impact Assessment
27/02/2017 first ISSG meeting
31/03/2017 approval of the forms for the stakeholders' consultation
Apr-Jul 2017 stakeholders' consultation, including OPC in all EU languages
28/08-08/09 ISSG review of the study's draft final report
13/09/2017 ISSG meeting on the study's draft final report
09/10/2017, 24/10/2017 and 16/11/2017
ISSG meetings on Commission's Impact Assessment Report
27/11/2017 approval of the study's final report
3.
Consultation of the RSB
The RSB was consulted on 24/01/2018 and provided, via written procedure, a positive
opinion on 26/01/2018.
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ANNEX II
1.
Background to the initiative
Synopsis Report
Excise duties are indirect taxes on the sale or use of specific products. They are usually
applied as an amount per quantity of the product e.g. per kg / per hl /per degree alcohol / per
1000 pieces etc. All revenue from excise duties goes entirely to the Member States. In the EU,
Member States must apply excise duties to alcohol, tobacco, and energy.
Directive 2008/118/EC
53
sets out the general arrangements for the holding of excise goods
and their movements between Member States. It explains the arrangements for deferring
payment of excise duty available to authorised traders who hold excise goods or move excise
goods between Member States.
The current initiative intends to harmonise and simplify provisions for the export, import and
transit of excise goods. It aims support the automation of movement control procedures -
mainly used by small and medium enterprises - in order to harmonise and simplify these
arrangements.
2.
Summary of consultation activities carried out
The consultation strategy has focused on three main groups of stakeholders: Member States'
administrations, economic operators and citizens. This in-depth consultation programme
aimed to gain a better understanding of the overall functioning of the mechanisms established
by the Directive, the logic underlying intervention, details of the issues at stake, the number
and type stakeholders involved and their roles, and the Directive’s connection to other
relevant EU policies. In addition, the objective of the consultation activities was to gather the
views of the main stakeholders on a set of possible options for the revision of Directive
200/118/EC.
The main consultation activities that were carried out were:
A written questionnaire for all Member States authorities complemented by series of
interviews to selected Member State, taking into account geography and volume of
excise trade. More specifically, this consultation targeted customs, excise and health
National Authorities.
The economic operators' consultation included a series of interviews, as well as a
detailed questionnaire sent to the most relevant stakeholders (e.g. EU customs' trade
contact group, Excise Contact Group).
An open public consultation was conducted to gather the views of citizens, non-
government organisations, economic operators and other stakeholders on a set of
possible options for the revision of the Directive. Each economic operator responding
to this consultation was offered to get the detailed Economic Operator questionnaire
(see above) upon request. The consultation lasted 3 months and was available in all
EU languages.
All consultation activities took place between April and July 2017.
53
Council Directive 2008/118/EC
of 16 December 2008 concerning the general arrangements for excise duty
and repealing
Directive 92/12/EEC
OJ L9/12 14.1.2009
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Table 1. Overview of respondents
Nb
Member States' authorities
interviews
replies to questionnaire
Economic Operators
interviews
replies to questionnaire
Open Public Consultation
replies to questionnaire
documents uploaded
41
31
Same countries as Member State plus Italy
with more than one informant per interview
Including 10 with less than 50 employees
Including 38 Economic Operators (out of which,
10 with less than 50 employees) and 48 Trade
Associations
7
21
20
Belgium, Czecz Republic, Germany, France,
Ireland, the Netherlands, Poland
For a total of 85 informants interviewed
Customs & Excise
MS replies to the questions related to health
Comments
151
38
3.
Results of consultation activities
Member States' consultation
The major source of information for estimating the magnitude of problems and for forecasting
the counterfactual effects of implementing particular policy options were answers to the
detailed technical questionnaires and in-depth consultations with stakeholders in selected
Member States.
The questionnaires were designed to gather quantitative information on the current state of
affairs, such as the number of specific types of excise movements and the economic costs
related to the current arrangements. Since some MS already apply on their own specific
measures or arrangements that are planned to be implemented on an EU-wide basis, the data
gathered in these Member States was utilised not only to estimate the magnitude of the
problems but also to extrapolate the costs and benefits from implementing specific policy
options. In addition, for each analysed policy option, opinion questions and questions
regarding suspected costs and benefits were included in the questionnaire.
To accurately address the different types of problems faced by the Member States' authorities
and economic operators, two versions of the questionnaire were created. The questionnaire for
authorities focused on administrative costs, enforcement costs, and suspected values of fraud.
It contained 82 open-ended questions that required the cooperation of various services within
and between the excise, customs, and health authorities.
In addition to the questionnaire, an in-depth consultation programme was conducted. It was
limited to eight Member States—namely, Belgium, the Czech Republic, France, Germany,
Ireland, Italy, the Netherlands, and Poland,—and aimed to gain a better understanding of the
overall functioning of the mechanisms established by the Directive, the underlying
intervention logic, the magnitude of problems experienced, and the effects of potential policy
options, as well as the nature of the issues at stake, the stakeholders involved and their roles,
and, finally, the Directive’s connection to other relevant EU policies. The selection of
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countries for case studies was based on the criterion of having a representative distribution of
geographical-, market-, and excise tax-related factors within the EU.
The interview programme was conducted over 12 weeks. Overall, authorities from 25
Member States provided their answers to the detailed technical questionnaire. The questions
to the problem area of excise and customs were answered by representatives from 21
countries, whereas the questions to the problem area of the private acquisition of alcoholic
beverages and tobacco products by individuals were answered by health authorities from 20
countries.
Economic operators' consultation
The questionnaire for economic operators was designed for:
1. both large economic operators and small and medium enterprises (SMEs);
2. players engaged in movements of different excise products (manufactured tobacco,
energy products, and alcoholic beverages); and
3. operators in different stages of the value chain (producers, wholesalers, retailers, and
logistics companies).
The questionnaire focused on compliance and hassle costs. To maximise the response rate,
which could have been limited by information privacy, all 50 questions included in the
questionnaire for economic operators were closed-ended, with pre-defined ranges for answers
to the questions that asked for specific numerical values.
A summary of the responses from economic operators by size of company, origin, and
specialisation is depicted in Table 2 below.
Table 2.Response summary to the detailed technical questionnaire for economic operators
Country of Origin No. of Respondents
Main Economic
No. of
Italy
10
Activities
Respondents
Germany
6
Alcohols and
France
3
alcoholic
15
United Kingdom
3
beverages
Manufactured
Belgium
2
12
tobacco products
Netherlands
2
Energy products
4
Poland
2
Ireland
1
Other
1
Romania
1
Luxembourg
1
Total
32
Total
Open public consultation
31
The questionnaire for the open public consultation included 30 questions divided into six
thematic sections, as well as 11 identification questions. The questions focused on the
respondents’ level of satisfaction with the current arrangements and their perceptions
on
whether specific actions should be taken at the EU or Member State level within specific
62
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problem areas. Importantly, the questionnaire also asked economic operators for the magnitude
of efforts currently borne by them.
Table 3 gives a summary of the responses to the open public consultation by size of company,
origin, respondent type and specialisation.
Table 3. Response summary to the open public consultation
Country of origin
Sweden
Belgium
Germany
Italy
France
Spain
Finland
United Kingdom
Austria
Netherlands
Poland
Total
Respondent type
Private citizen
Economic Operators
(out of which: SMEs)
Trade, business and
professional associations
Public authority (national,
regional, local)
Non-government
organisation
Other
No answer
Total
No. of respondents
45
13
11
10
8
8
7
6
5
5
5
151
No. of
respondents
49
34
(16)
48
0
16
4
0
151
Country of origin
Estonia
Czech Republic
Denmark
Hungary
Luxembourg
Portugal
Greece
Ireland
Slovenia
Other
No answer
No. of respondents
4
3
3
3
3
3
2
1
1
4
1
Main economic activities
Alcohols and alcoholic
beverages
Manufactured tobacco
products
Energy products
Other
No answer
No. of
respondents
19
10
6
1
117
Total
151
Responses to the questionnaire were an important source of information that was often
combined with the responses to the detailed technical questionnaire. The following sub sections
briefly presents the results of the most important parts of the open public consultations:
A. Excise-Customs Interactions
The first section of the questionnaire was on excise-customs interactions and addressed five
questions to economic operators and stakeholders with knowledge on import or export
procedures. Answers of the 36 economic operators and 48 associations cover engagement in the
export or import of excise goods, their perception of the current procedure, and the assessment
of potential improvement.
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Table 4 and 5 below present the level of satisfaction with the current procedures for exporting
goods and for importing goods, respectively.
Table 4. Level of satisfaction with current procedures for exporting goods
Table 5. Level of satisfaction with current procedures for importing goods
In the case of export procedures, the level of dissatisfaction (41 respondents) is higher than the
level of satisfaction (22 respondents), pointing out that there is room for improvement of these
procedures. In the case of imports, the situation is different, with more respondents satisfied
with the current procedures (44), as opposed to dissatisfied respondents (only 10).
Table 5. Level of agreement with the option to cross-check data between customs
declarations and excise electronic administrative documents
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The final question related to the level of agreement of respondents to the option for improving
the current situation. Most respondents (73 or 48%) agreed with the option, with only 4
respondents disagreeing.
B. Duty-Paid Business-to-Business procedures (B2B)
Table 6. Level of satisfaction with current duty paid business-to-business procedures
As can be seen from Table 6, most of the respondents that answered the question were
dissatisfied or very dissatisfied with the current procedures (49 respondents or 32%) and only 5
respondents (3%) were satisfied with them, pointing out to a need to further improve these
procedures.
When asked what is the most adequate level to take action, 45% (68 respondents) indicated the
EU level, while only 4% (6 respondents) thought that the national level is appropriate.
There respondents were then presented the option for improvement of the current situation by
automating the duty paid B2B procedures, EU-wide. They were then asked two further
questions: one on the effort needed to comply with the new requirements and one on the
usefulness of such a change.
As regards the efforts to register as an excise operator and to change the internal process of the
organization in order and to switch to computer based procedures, most respondents estimated
them to be low or very low (49 respondents for the registration as an excise operator and 38
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respondents for the change of internal processed respectively) while only 6 respondents (for the
registration as an excise operator) and 8 respondents (for the change of internal processed
respectively) estimated them to be high or very high. This indicates a low potential burden of
the changes on the concerned organizations.
Table 7. Usefulness of switching to computer-based procedures
As can be seen from the table above, most respondents (68 or 45%) believe the option would
be useful for their organizations, with only 3 respondents (or 2%) disagreeing.
C. Low Risk Movements
Table 8. Level of satisfaction with current low risk movements
(under 1 000€ or 20% of
the value of the goods)
As can be seen from Table 8, most of the respondents that answered the question were
dissatisfied or very dissatisfied with the current procedures for low risk movements (48
respondents or 32%) and only 6 respondents (4%) were satisfied with them, pointing out to a
need to further improve these procedures.
When asked what is the most appropriate level for improving the current procedures, 48% (72
respondents) indicated the EU level while 3% (5 respondents) indicated the national level. One
association commented that the solution is “EMCS exemption for low value movements (…)
harmonised within EU and applicable to all excisable goods.”
The respondents were presented the option to improve the current situation which would be to
replace the current movement control by a monthly return, similar to a VAT monthly return. In
that case, there would not be a supervision of the movements by the national authority on a per-
movement basis anymore.
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The majority of respondents rated the suggestion positively: 60 of them (or 40%) believing the
impact of the option to be beneficial or very beneficial and only 4 respondents (or 3%) believing
this would be detrimental or very detrimental.
Table 9. Impact of using monthly returns for your organization, compared to the current
procedures
.
Thus, it can be concluded that there is a relatively important level of support for this option
from the side of the respondents that have taken part in the open public consultation.
D. Exceptional Situations such as Shortages, Excesses, Rejections or Interruptions
Currently, strategies to face exceptional situations vary between EU Member States. These
strategies include means, processes, and methodologies, address shortages, excesses, rejections,
or interruptions of movements. Determined by the national approach, these exceptional
situations may cause irregularities, duty claims, penalties, or seizure of goods. For this chapter,
the respondents evaluated the current frequency of exceptional situations, expressed their
expectations for improvements, and rated various options for enhancements that would
harmonise the approach across the EU.
As in the previous sections, most of the respondents supported action at EU level (68
respondents or 45%) with only a small minority of 2% (3 respondents) indicating that they
would rather see action at national level.
The survey described the options considered by the European Commission to improve the
current situation: to harmonise at EU level the methodology for assessing shortages and
excesses as well as to ensure a right to be heard exists in each Member State for the exceptional
situations and related public authorities' decisions that can occur during the movements and
holding of excise goods. It also described the option to harmonise at EU level the consequences
(duty claims, penalties or seizure of the goods) of exceptional situations.
Then the respondents were asked to rate how useful each of the 3 options would be for them:
Level of necessity of an EU harmonization of methodologies for assessing shortages and
excesses: 68 respondents ( 45%) found this useful, as opposed to 2 respondents (1%)
who did not find it useful;
Level of necessity of an EU harmonised right to be heard: 74 respondents ( 49%) found
this useful, as opposed to only 1 respondent (1%) who did not find it useful;
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Level of necessity of an EU harmonization of the consequence of exceptional situations:
66 respondents ( 44%) found this useful, as opposed to 2 respondents (1%) who did not
find it useful;
Thus, it can be concluded that the level of support for these changes clearly outweighted the
opposition to such changes.
E. Risk Analysis
At times, national public authorities lack the necessary data to analyse the fiscal risk of
movements of excise goods. To counteract this deficiency, economic operators could provide
additional information about their business and their movements of goods.
As for the sectors the businesses operate in, it is remarkable that the majority of economic
operators that move manufactured tobacco products expect a low effort for the report of
requests and renewals of warehouse capacity (60%). On the other side, operators in the area of
alcohols and alcoholic beverages expect the highest effort, reporting only very high, high, and
moderate efforts to equal shares (23.5%). The effort estimated by businesses from energy
products may be found in the middle, between the two extremes. Table 10 summarises these
responses.
Table 10. Effort for request/renewals of warehouse capacity by sector (in percent)
Manufactured tobacco products
20,0 10,0
60,0
10,0
Energy products
33,3
33,3
16,7
16,7
Alcohols and alcoholic beverages
0%
Very high
High
23,5
20%
23,5
40%
23,5
60%
29,4
80%
100%
Moderate
Low
Very low
Don't know
F. Acquisition by private individuals
The Council Conclusions
54
call on the Commission to explore the possibilities for revising the
provisions on guide-levels for intended own use of alcohol (and tobacco), set out in Article 32
of the Directive. Furthermore, the Council Conclusions on "Cross-border aspects in alcohol
policy
—
tackling the harmful use of alcohol"
55
also invite Member States and the Commission
to tackle the issue of the cross-border purchases of alcoholic beverages to support the
effectiveness of national alcohol and health policies.
In the last section of the open public consultation as well as in a separate targeted questionnaire
to national health authorities, the respondents were asked several questions related to the effects
of the Directive on public health, especially those related to guide level thresholds for personal
consumption. According to the Directive individuals can transport excise goods (such as
cigarettes or alcohol) to another EU country without paying any excise taxes, provided they are
54
55
Council Conclusions on Commission report on Council Directive 2008/118/EC (adopted on 5/12/2017)
http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52017XG1222(01)&from=EN
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for personal use
56
. However, it should be noted that any changes related to these issues was
outside the scope of the current proposal, and these questions were of an exploratory nature
only. This topic triggered high interest in the open public consultation (especially from
respondents in one particular Member State), as well as in the Member States' consultation.
Most respondents to the open public consultation (64 respondents or 42%) were not aware of
negative impacts of the Directive on public health related to tobacco or alcohol consumption,
but there was a relatively high number of respondents that was aware of such effects (55 or
36%), as it is shown in Table 11.
Table 11. Open public consultation - awareness of any negative impact of Directive
2008/118/EC on public health related to tobacco or alcohol consumption?
Respondents to the open public consultation were asked to assess four different measures to
possibly alleviate the negative impact on health. The results can be seen in the table below.
Table 12. Open public consultation
57
- possible measures to alleviate the negative impacts
on health (absolute number of respondents and percentage)
Useful
Lower the EU minimum thresholds of
the guide levels in the Directive
Allow national adjustments of the
guide levels
to prevent
disproportionate negative effects on
excise tax collection
Allow national adjustments of the
guide levels
to prevent
disproportionate negative effects
on
56
Neutral
8
(5%)
9
(6%)
Not useful
28
(19%)
25
(17%)
Don't know/no
answer
55
(36%)
56
(37%)
60
(40%)
61
(40%)
64
(42%)
8
(5%)
25
(17%)
54
(36%)
The current thresholds are 800 cigarettes, 110 l of beer, 90 l of wine or 10 l of spirits.,
Views of economic operators, NGOs and private individuals have been collected. While most of economic
operators were not in favour of adjusting the guide levels, about 80% NGOs and private individuals
supported this option.
57
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public health
Allow national adjustments of the
guide levels
by removing the EU
minimum thresholds
56
(37%)
8
(5%)
31
(21%)
56
(37%)
When it comes to the results for the targeted questionnaire that was addressed to the national
health authorities, 9 national authorities indicated that they are aware of negative impacts of
the Directive on public health, while 7 were not aware of such negative impacts. The
remaining 12 national authorities did not reply to the survey or did not know.
The respondents to the national health authorities' targeted questionnaire were also asked to
assess four different measures to possibly alleviate the negative impact on health:
Table 13. Targeted questionnaire to national authorities - possible measures to alleviate
the negative impacts on health (absolute number of authorities)
Useful
Lower the EU minimum thresholds of
the guide levels in the Directive
Allow national adjustments of the
guide levels
to prevent
disproportionate negative effects on
excise tax collection
Allow national adjustments of the
guide levels
to prevent
disproportionate negative effects
on
public health
Allow national adjustments of the
guide levels
by removing the EU
minimum thresholds
12
13
Neutral
1
3
Not useful
5
1
Don't know/no
answer
10
11
13
3
1
11
7
2
7
12
Thus, it can be concluded that there is an interest in more flexibility on the guide levels, both
among the citizens as well as the national health authorities.
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ANNEX III Who is affected by the initiative and how
1.
Practical implications of the initiative
National excise and customs authorities are affected by this initiative, which reduces their
administrative burden and improves their capacity in fighting fraud at the (enforcement) cost
of evolutions in their IT systems and their business processes.
Economic Operators involved in the holding and movement (including imports and exports)
of excise goods are affected by this inititave. It reduces the regulatory burden at the cost of
providing a few extra data items to their National Authorities and of some evolutions in their
IT systems.
Most of Economic Operators affected by this initiative are large companies. However the
automation of the duty paid business-to-business procedures is expected to benefit to Small
and Medium Entreprises.
Cost and Benefit figures are provided in each chapter for each problem area (e.g. "customs
–
excise interactions: export", "duty paid business-to-business").
2.
Summary of costs and benefits
The tables here below summarise the costs and benefits (in million euros) for all preferred
options together.
Note 1:
none of the options provide benefits or induce costs to citizens or consumers.
Note 2:
no indirect costs have been identified during the impact assessment
I. Overview of Benefits (total for all provisions)
–
Preferred Options
Amount
Description
Comments
per year
Direct benefits
Member States
● EU common requirements for alternate
proof of exit and exceptional situations will
reduce the time spent on processing files and
administrative cost savings
14.55 disputes
● the
automation of the current paper-based
duty paid B2B procedures will increase staff
productivity
● data cross-check
between excise and
customs will increase data quality and
consistency, making fraud more difficult at
impact on fraud
+
import and export
●
automation of duty paid B2B procedures
will improve the monitoring of cross-border
movements of excise goods
Economic Operators
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regulatory cost savings
32.27
(1)
● EU common requirements for alternate
proof of exit and exceptional situations will
reduce the time spent on disputes
● automation of duty paid B2B procedures
will make processing faster, which will
immobilise the movements' guarantee for a
shorter period of time
Indirect benefits
Economic Operators
● from
the stakeholders' consultation, it
appears that the automation of duty paid B2B
procedures will reduce regulatory costs more
to SMEs than to large companies
● EU common requirements for alternate
proof of exit and exceptional situations will
reduce the overhead of disputes with other
Member States than the one of establishment
and may increase competitiveness of SMEs
impact on market and SMEs
+
(1) This figure is lower bonds as some preferred options (Allowable losses thresholds, Right
to be Heard; see section 7.5) bring benefits that are not quantified.
II. Overview of costs (million euros)
–
Preferred options
Businesses
Direct costs
Indirect costs
1.32
(4)
Administrations
4.34
(1)
0.00
0.87
(1)
0.00
One-off Recurrent One-off Recurrent
Excise-export data cross-check
EU common list of alternate
Direct costs
proofs of exit
Indirect costs
Excise-export
followed
external transit
by
Direct costs
Indirect costs
Direct costs
Indirect costs
14.50
(2)
2.90
(2)
0.13
(4)
Excise-import data cross-check
3.40
(1)
9.89
(3)
0.00
0.68
(1)
1.98
(3)
0.36
3.89
Automation of duty paid
Direct costs
business-to-business procedures
Indirect costs
EU common requirements for
Direct costs
exceptional situations
Indirect costs
TOTAL
Direct costs
Indirect costs
14.50
4.35
17.63
(1) enforcement costs, mostly for the evolutions of IT systems
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(2) compliance and hassle costs to register as a duty paid B2B economic operators and
enforcement costs for the evolution of IT systems
(3) administrative costs to register and authorise duty paid B2B economic operators and
enforcement costs for the evolution of IT systems
(4) administrative costs to provide excise references in the customs export and import
declarations
ANNEX IV Analytical Models used in preparing the Impact Assessment
Volume of Trade and Fraud for excise goods.
Document [R1] provides overall figures on the goods value and excise duty of excise goods
imported to the EU, exported from the EU and moved cross-border intra-EU. It also assesses
that the fraud on excise goods amounts to about EUR 5.2 billion per year for 17 Member
State, which is extrapolated to EUR 8.6 billion per year for 28 Member State.
Document [R3] states that, for tobacco alone, the EU VAT and duty gap is about 10 billion
euro per year
58
, including an excise duty loss of about EUR 7 billion per year. Document [R4]
assesses the excise duty gap in the UK alone at GBP 2.8 billion (EUR 3 billion) in 2015.
From the documents quoted here above, the overall EU excise fraud is assessed at EUR 10
billion per year; the EU excise fraud per area (import, export, intra-EU) is extrapolated at the
prorata of the goods value
59
.
However, the bulk of the excise fraud comes from patterns such as smuggling into the EU or
illicit production in the EU, which do not involve any declared movement whatsoever. So, the
amount of fraud on which the Directive can act upon is only a part of the overall EU excise
fraud and this part corresponds to the trade of excise goods which is declared at least partly
(e.g. declared at the Member State of Dispatch or at the Member State of Destination). Based
on an analysis of discrepancies in the declared volume of trade in IntraStats between acquirers
and providers, document [R5] provides an estimate of this amount of fraud for the Intra EU
trade between EUR 174 and 636 million per year, i.e. an average of about 400 million euros
per year. Extrapolated at the prorata of the goods value, the fraud on which the Directive can
act upon at import and export are assessed at 648 million euros and 198 million euros
respectively.
The stakeholders' consultation provided also some inputs on suspected fraud related to
problems and options in the scope of this initiative. Extrapolated EU-wide based on the
volume of trade, these inputs leads to a suspected excise revenue loss of EUR 28 million for
export, 21 million for export using Single Transport Contract and 20 million for duty paid
B2B.
IT Cost Model for member States
To assess the cost of IT systems evolutions for member States, the independent contractor
chose to re-use a model established in 2012 for the cost assessment of the IT systems required
by the Modernised Customs Code (now Union Customs Code). This IT cost model was
deemed valid for this initiative as the excise trans-European IT systems are close to the
customs' ones in many aspects (architecture, organisation, etc.)
60
.
58
59
Europol,
quoting
KPMG,
reports 11 billion euros of tax & duty loss related to tobacco fraud in 2015.
For instance, the excise fraud at import is extrapolated to 10 * (432/834) = 5.2 billion euros per year
60
For instance, EMCS and SEED are close to customs' IT systems New Computerised Transit System (NCTS)
and Economic Operator System (EOS) respectively.
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The principle of this model is to first assess the IT development cost based on indicators of
the required evolutions (e.g. number of impacted tasks, processes, messages) and then to
extrapolate the other IT costs (e.g. quality assurance, deployment, operations) from the IT
development ones.
This description of the 2012 IT cost model is copied here below.
The basis for the estimation method resides in the analysis of business process models for the
implementation of evolutions and on using specific customs process areas that were modelled
in detail and precisely estimated. These facts allow to build an estimation model based on
counting sizing parameters (number of processes, number of unique tasks in those processes,
number of new information exchanges, number of interfaces to existing IT systems), and
calibrate it using the precisely estimated projects, counting the same sizing parameters on
these IT projects.
Moreover, the model has been adapted to reflect the diversity of current IT systems for
Customs in the MS, in terms of technology, architecture and status. The model uses three
types of IT situations for a MS that will introduce additional parameters in the effort and the
cost for the implementation of an IT project to improve the accuracy of these estimations,
using the available information for these IT projects.
Type 1:
The existing IT system has been built using flexible/modular architecture
such as Service Oriented Architecture and it will be upgraded to support the new
functionality;
Type 2:
The existing IT system has been built using older technology (monolithic not
modular structure) and it will be upgraded to support the new functionality;
Type 3:
A new system will be implemented to accommodate the changes brought by
the project using new flexible/modular architecture such as Service Oriented
Architecture.
The estimation method is detailed hereafter.
The Basic assumption for the effort and cost estimation concerns the activities and related
costs that are included in the estimation and the ones that are excluded.
The implementation tasks that are
included
in the estimations are the following:
Functional and technical systems specifications (FSS, TSS);
System Design, Build and Testing activities (DBT);
Deployment, Roll-out and Conformance tests activities;
Project management and Quality assurance activities.
Yearly recurring costs for infrastructure, maintenance, support and operations costs are
estimated at 20% of the implementation costs.
Also the model is built on the following assumptions
All processes are in average of equivalent size/complexity;
Level of granularity in L3 BPM's is coherent in all BPM's inspected;
Updates in Tasks and in messages lead to the same implementation effort;
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All tasks in L3 BPMs inspected are assumed to be automated tasks (i.e. to be
implemented by an IT system);
Type 1/2/3 Member States are assumed to have type 1/2/3 applying for ALL the
options of this initiative.
The generic algorithm used to estimate Member State project implementation effort takes into
account the following steps and parameters:
1. For each project, the existing applicable BPMs are used to count:
The total number of processes in scope (#
processes);
The number of processes where a change is occurring (#
of changed processes);
The total number of unique tasks in those processes (#
of tasks);
The number of tasks where a change is occurring (#
of changed tasks);
The number of new or updated information exchanges (messages) in these processes
(#
of messages);
In addition, for each project, the number of new or updated interfaces with other
(existing) systems (or other process areas) (#
of impacted interfaces),
and the total
number of interfaces (#
of interfaces).
3. The different project activities are assumed to be dependent on one or many of the above
parameters, as follows:
Functional System Specifications (FSS):
o
The total number of processes determines the effort for Functional System
Specifications activities (it is assumed all the processes will need to be
specified, even if no change);
o
The effort is computed as follows:
total FSS effort
=
# processes
×
effort for 1 process FSS;
Technical System Specifications (TSS):
o
The number of processes only where a change is occurring, determines the
effort for the Technical System Specifications activities;
o
The effort is computed as follows:
total TSS effort = # of changed processes
×
effort for 1 changed process TSS;
Design, Build and Test (DBT):
o
The number of tasks where a change is occurring and the number of new or
updated information exchanges (messages) determine the effort for the Design-
Build-Test activities;
o
The number of interfaces to other (existing) systems (or other process areas)
adds an effort percentage to Design-Build-Test activity;
o
For estimating the Design-Build-Test effort for each project, the Member
States are assumed to have be in one of the three following categories for each
project:
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Type 1:
The existing IT system has been built using flexible/modular
architecture such as Service Oriented Architecture and it will be
upgraded to support the new functionality.
In that case the DBT estimation is done as follows: the number of new
tasks added to the number of new messages, multiplied by the effort for
one task and message. The Design-Build-Test effort (DBT) effort is
also increased by an additional 3% per changed interface to an existing
system (e.g. if the project needs to change for instance 3 interfaces to
other systems, the effort is increased by 9%):
total DBT effort =
(#
of changed tasks
×
effort for 1 task
+
# of
messages
×
effort for 1 message)
×
(1 +
# of impacted interfaces
×
0.03);
Type 2:
The existing IT system has been built using older technology
(monolithic not modular structure) and it will be upgraded to support
the new functionality.
To reflect the old technology stack that is more costly to change, an
additional 40% DBT effort of is estimated with regard to the
flexible/modular architecture. The DBT effort is increased by an
additional 5% per changed interface to an existing system instead of
3% that was applied for the flexible/modular architecture type 1 (e.g. if
the project needs to change for instance 3 interfaces to other systems,
the effort is increased by 15%):
total DBT effort =
(#
of changed tasks
×
effort for 1 task
+
# of
messages
×
effort for 1 message)
×
1.4
×
(1 +
# of impacted interfaces
×
0.05);
Type 3:
A new system will be implemented to accommodate the
changes brought by the project using new flexible/modular architecture
such as Service Oriented Architecture.
In this case, the total number of tasks parameters drives the Design-
Build-Test (DBT) effort, increased by 3% per interface to an existing
system, and counting here all the interfaces to other systems. For some
projects a multiplication factor (factor 2 applied to Entry and Import
and Centralised Clearance projects; factor 4 for NCTS) is applied to the
number of tasks, to reflect the fact that most processes not changed by
legislation are not modelled and so do not enter in the counting, and in
addition, some specific national (sub-)processes might also need to be
included (i.e. related to excise, VAT, ...):
total DBT effort =
(#
of tasks
×
effort for 1 task
+
# of messages
×
effort for 1 message)
×
(1 +
# of interfaces
×
0.03).
For an EU-wide cost estimate of the options in this initiative, it is assumed that all
Member States are of Type 1. This is because excise IT systems (EMCS and
SEED) are recent and the customs IT systems to be interfaced with them are being
modernised due to the implementation of the Union Customs Code.
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4. The other project activities are assumed to be a percentage of the previous activities efforts,
as follows:
The Deploy-Rollout-Conformance Tests activities are assumed to be 20% of the
Design-Build-Test;
The Project Management activities are assumed to be 15% of all the previous
activities; and
The Quality Assurance activities are assumed to be 20% of all the previous activities
(including PM).
In addition, the effort and cost method for MS take also into account the following variations:
For Project management and Quality assurance (PM and QA) Member States
efforts presented above are merged in a single multiplication factor, assumed to be
equal to 38% of Design-Build-Test and Deploy/Roll-out efforts.
5. To calibrate the model, the RSS (Regular Shipping Service authorisation) and the COPIS
projects that have accurate estimates and parameters, are used to count the same parameters,
and come to effort values for the parameters (for FSS, TSS and DBT):
The currently derived value for 1 process: around 50 Man-days;
The currently derived value for 1 process with change: around 50 Man-days;
The currently derived value for 1 task with change: around 35 Man-days;
The currently derived value for 1 message exchange: around 35 Man-days.
When no sufficientlty detailed business process models were available for a given option, the
IT cost was extrapolated from the Member States' inputs from the stakeholders' consultation.
IT cost for Economic Operators: no IT cost model was available for Economic Operators. So,
this cost was extrapolated from the Economic Operators' inputs from the stakeholders'
consultation
61
.
Man*day cost
Two profiles apply to the cost models used in this impact assessment, in order to translate
efforts into financial values.
For IT cost, the same man*day rate was used as the 2012 IT cost model referred to here above
(the EU-average
value was 500€ in 2012), with an overhead equal to the growth of labour cost
for IT specialists between 2012 and 2016, leading to 559€ per man*day in 2016.
For other costs (e.g. administrative cost), the Commission's 2017 Standard Cost Model was
used, with profile ISCO3 "Technicians and associate professionals" (see document [R5]
Annex E).
61
For instance, if an option has an impact on each movement of excise goods and if Economic Operators, whose
trade volume represent 10% of the EU number of excise movements, indicated in their replies to the
stakeholders' consultation a total cost of EUR 100,000, then the EU-wide IT cost for Economic Operators for
this option is extrapolated to EUR 1 million.
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ANNEX V
Reference Documents
[R1] "Evaluation
of current arrangements for the holding and moving of excise goods under
excise duty suspension"
(2016)
[R2] "Evaluation
of current arrangements for the cross border movements of excise goods
that have been released for consumption" (2015)
[R3] "COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE
EUROPEAN PARLIAMENT - Stepping up the fight against cigarette smuggling and
other forms of illicit trade in tobacco products - A comprehensive EU Strategy"
(COM(2013)
324 final)
[R4]
Measuring Tax Gap
in the UK
–
2016 edition
[R5] "Study contributing to an Impact Assessment on Council Directive 2008/118/EC
concerning the general arrangements for excise duty" 27/11/2017 [yet to be published]
[R6] "Council
Conclusions
on Commission Report on Council Directive 2008/118/EC"
adopted on 05/12/2017
ANNEX VI areas for improvement identified in the evaluations and not addressed
Some areas for improvement identified in the evaluations and/or in the Council conclusions
(see [R1], [R2] and [R6]) have not been addressed in this Impact Assessment for the
following reasons.
a) Guarantees and obstacles to obtaining economic operator authorisations: These issues were
not considered further as there were no clear conclusions from evaluations about the way
forward. The evaluation studies did not reflect the issue of guarantees as a major cause of
concern to economic operators, and the evaluation studies did not indicate any major
obstacles to economic operators joining the schemes. Therefore this area did not indicate clear
options that could have been explored in the Impact Assessment.
b) Distance selling: A real simplification for distance selling of excise goods can only be
achieved if the requirement of having a tax representative is abolished, the payment of excise
duties in the Member State of consumption is simplified but secured and the seller does not
need a VAT number in the Member State of consumption. This was as well the conclusion of
a project group with Member States in 2015. Distance selling (together with acquisition by
private individuals) is also an area with potential public health impact which may
compromise Member States policies to reduce alcohol related harm. The Commission decided
to postpone the examination of distance selling of excise goods until a One Stop Shop for
VAT was adopted. The VAT e-commerce Directive was adopted by the Council on 5
December 2017 and a study will be launched by the Commission in 2018. Once the outcome
of the study will be known, the appropriateness of presenting a legislative proposal on this
topic will be assessed.
c) Acquisition by private individuals: until 2016, no stakeholder (European Commission,
Member State or Economic Operator) showed any particular interest in the guide levels
specified in Article 32 of Directive 2008/118/EC. Early 2017, some Member States (e.g.
Estonia, Finland, Sweden) and DG SANTE proposed to include the issue of cross border
purchases of alcohol and tobacco for personal use into the evaluation process of the Directive
2008/118/EC to support health policies. However this is a potentially sensitive topic for
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citizens, which had not been previously evaluated and was not supported by some other
Member States (e.g. Germany, Luxembourg). The Commission will conduct a joint excise
and health back-to-back evaluation and impact assessment in 2018-2019, supported by a study
performed by an external contractor, which is fully compliant with the Council Conclusions.
Once the outcome of the study will be known, the appropriateness of presenting a legislative
proposal on this topic will be assessed.
d) Journey time limits restrict the maximum journey time estimate that can be entered on an
electronic administrative document (e-AD). The previous situation, which existed during the
evaluation, was that any estimated journey time could be entered of up to 92 days, which
made the journey time estimate useless from a control point of view. In the meantime this has
been addressed by an amendment of the Excise Movement Control System (EMCS)
Implementing Act (Regulation (EC) 684/2009) to introduce more reasonable maximum
journey times. These changes were implemented in EMCS in February 2018.
e) Direct delivery definitions were not raised as an issue by stakeholders during the evaluation
studies, nor in the open public consultation.
f) The procedures for the supervision of the movement of ships and aircraft’s stores were
discussed with Member States in the Excise Committee, acting as an expert group in 2010.
Article 41 allows Member States to choose whether to exempt ship stores from VAT and
excise duty, but previously there was no commonly accepted way of supervising such goods
from a place of dispatch onto the ship. The conclusion was that such stores, where the
Member State of loading agreed that such goods should be exempt from VAT and excise
duty, should be subject to export formalities, but not the export procedure. So, in the case of
an indirect movement, the Export Control System (ECS) would deliver an exit result to
confirm loading of the goods, but this would not otherwise be treated as an export. This
conclusion was further discussed during the drafting of the Union Customs Code and is now
legally reflected in Article 269 (2) (c) of the Union Customs Code.
g) EU risk analysis system: the potential enhancement to EMCS was mentioned in the 2015
evaluation study report for duty suspension; in meetings with Member States. The suggestion
was to add information to electronic administrative documents and the development of IT
tools, which could be used for enhanced risk analysis by Member States. However,
difficulties arose in reaching any common agreement about how to define specific options for
data and for tools. This idea of enhancement was eventually not part of the Council
Conclusions.
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