The turnover of excise goods may be specific depending on the product type. Furthermore, different products are marked differently from the point of view of the tax classification in the Excise Tax Act. This may give rise to difficulties in determining the rate of excise duty or the obligation to pay it.
Subject of the personal interpretation of the Director of National Tax Information of the date 4 April 2017 The signature. 1462-IPPP3.4513.3.2017.2.SM was the issue of excise duty on sales of alcohol in a version which is not applied on a mass scale.
The applicant for interpretation intends to purchase from the importer a specific type of alcoholic beverage (a liqueur with a pure alcohol content of 18% However, further sales involve a change in the type of packaging.
The entrepreneur intends to purchase liqueur in five-litre packs (marked tax bands) and then spill the product into stationary containers, allowing further spillage. At the final stage of the sale, the alcohol will be poured into bottles and sold to a customer who is not an entrepreneur (consumer).
The specificity of the sale in the case described is that the customer selects an empty bottle of a specific size after which it is filled with liqueur. However, the applicant does not offer ready-to-market product as in regular stores.
The applicant wanted to know whether the spillage of liqueur into empty bottles previously selected by the customer at the point of sale could be considered as alcohol production and consequently subject to excise duty (according to Article 93(2) The legislation on excise duty production of ethyl alcohol is also its spillage).
The Director of National Tax Information considered that in this case there was no obligation to pay excise duty as the spillage of liqueur as described by the applicant cannot be considered as production within the meaning of the Act:
„(…)However, it cannot be considered that ethyl alcohol is produced in accordance with the abovementioned provisions. The company will pour the same product (...) into other containers – disposable bottles selected by the customer. The spillage will occur in a retail store and will concern alcohol purchased in 5 liter canisters marked with tax bands (with excise duty paid). These activities should therefore only be considered in the form by way) of offering these products for sale.’
This interpretation points to the potential possibility of optimizing costs for retailers offering specific types of imported ‘top shelf’ beverages. The purchase of high-end alcoholic beverages in several-litre containers and spilling them into smaller packages just before the sale may mean a higher profit for the entrepreneur at the same retail price.