Court of Justice of the European Union (hereinafter: TEU) on 13 March this year has issued a judgment indicating what beverage can be considered as beer, which is consequently reflected in the excise duty applied.
The case referred to by the TEU concerns a small Polish brewer and how to qualify the beverages produced by this brewer.
Doubts in this respect have already arisen at the stage of the customs office, which, unlike the TEU, considered that the beverages produced by this brewer, due to the small amount of malt, should be classified under the nomenclature 2206 including:‘Other fermented beverages (for example, cider, perry and mead); mixtures of fermented beverages and non-alcoholic beverages, not elsewhere specified or included.’ The customs office did not agree with the trader, considering that the beverages which are produced by his brewery fall under the category number 2203, which includes: ‘Beer obtained from malt’.
The entrepreneur went all the way through the appeal, and each next body supported each previous sentence. As a result, the case went to a criminal court which decided to raise a legal question in the present case to the TEU.
The question involved distinguishing and applying the appropriate excise duty rate depending on the qualification of the beverage. The fact that both rates of excise duty differ greatly is of great importance.
I'm sure the sentence will please the brewers. By following the idea of the TEU, they will be able to save on excise duty by using glucose syrup instead of malt in their products
According to Act dated 6 December 2008 on excise duty (i.e.
Journal of Laws of 2018, item 1114 as amended) the beer is any of the products covered by the abovementioned heading 2203 and any articles containing a mixture of beer and non-alcoholic beverages of heading 2206, However, if the actual alcoholic strength by volume of these products exceeds 0.5% volume.
In this case, the entrepreneur would pay a excise rate of 7.79 PLN from 1 hectolitre for each degree of Plato finished product. In the second the case as regards the group described above under the number 2206, the rate for fermented beverages is even 158 PLN from the hectolitre of finished product.
Therefore, the choice of the rate may be of great importance for the company's finances. Therefore, it is important to properly qualify the beverage as a beer or as a fermented beverage.
The TEU faced the task of assessing whether a beer could be considered as a product in which the proportion of non-sweet ingredients in a barrel is superior to malt ingredients. So if beer can still be called a drink, whose basic malt ingredient is a minority in this product.
In the present case, the Court finds, to the delight of traders, that the Excise Directive allows the recognition that ‘beer obtained from malt’ is also an alcoholic product obtained from the fermentation of the cane, consisting in particular of glucose syrup and a small amount of malt. The proportions were not clearly indicated, but the Court referred to the fact that, as long as ‘objective characteristics and properties correspond to objective characteristics and characteristics of beer’, this beverage should be considered as beer.
I'm sure the sentence will please the brewers. The TEU will be able to save on excise duty by using glucose syrup instead of malt in their products. The question is whether consumers will also enjoy such a decision of the Court.
Source: TEU, Signature Judgment C-195/18
Author:
Nikol Małaszewska-Dąbrowska
Manager at the Legal Department. From 2011 It provides advice to leading companies from various sectors of the economy. He has extensive experience in conducting comprehensive projects in the field of national and international law. It participates in legal and tax reviews conducted to identify risks. He is also the author of numerous articles on tax issues, published in the industry press.