Excise duty
Also known as: excise
Excise is an extra charge on certain goods, such as alcohol, tobacco and mineral oils. On import it comes on top of import duty, and it is only due when the goods are released for consumption.
Which goods fall under excise?
Excise rests on a limited list of goods: mineral oils and other energy products, alcoholic drinks and tobacco products. The EU has harmonised the structure, the rates themselves are national. In the Netherlands those rates sit in the DTV, next to the TARIC data, so a declaration system can retrieve them per goods code. A chair or a machine has no excise, a cask of whisky does, and that difference shows up in the national codes at the heading. Besides excise, the Netherlands has a consumption tax on non-alcoholic drinks. That is not excise, but its behaviour on the declaration is similar: a national charge attached to the goods code, due on release for consumption. Do not mix the two up in the accounts, because the authorisations, the rates and the exemptions run apart. Excise goods fall outside DECO. Even below the threshold of one hundred and fifty euro a full import declaration in DMS is required, with the ten-digit TARIC code. A parcel of wine or cigarettes therefore cannot be handled via the H7 set, regardless of the value.
How does excise relate to import duty?
Import duty and excise are two separate charges, with two separate taxable events. Import duty is due on release into free circulation. Excise is due on release for consumption, the moment the goods leave the suspended chain and enter the market. You can therefore already have paid import duty while the excise is still outstanding. That is exactly the T2-excise status: Union goods, import duty paid, excise not yet. On the declaration you see both amounts, but they run through different rules. Import duty follows from TARIC, excise from the national rates in the DTV. A preferential zero rate on the import duty says nothing about the excise. The order in the chain is mandatory. First the customs status, then the excise status. Anyone who brings excise goods from the terminal straight into free circulation without excise suspension is due both charges at once. Anyone who moves them to a tax warehouse (AGP, the Dutch accijnsgoederenplaats) suspends the excise until release. That choice must match the declaration and the authorisation, otherwise a recovery follows.
When is excise due?
The taxable event is release for consumption. That is the moment the goods leave excise suspension: sale to a customer without an authorisation, consumption in your own business, or a shortage you cannot explain. Until that moment the stock may lie under suspension in an AGP, or be in transit with an electronic administrative document in EMCS. On import from a third country, release for consumption coincides with the import, unless you place the goods immediately under excise suspension. Without an AGP authorisation or without a valid movement to an AGP, the excise is therefore due on the import declaration. Customs calculates the amount in DMS on the basis of the national excise code at the goods code. A shortage, damage or theft in the suspended chain also counts as release for consumption, unless you prove force majeure. The AGP accounts must be able to explain the physical stock. A gap between the accounts and the count is, for the inspector, a release on which excise, and often also VAT, is due.
How does suspension of excise work?
Suspension means the excise has not yet been charged, while the goods are already in the EU. For that you need an AGP authorisation, or you receive the goods under suspension from another authorisation holder. The stock then stands under supervision, with accounts that record entries, releases, movements and losses. Movement between AGPs inside the EU runs via EMCS, the Excise Movement and Control System. Each movement gets an ARC, an administrative reference code, and must be discharged within the time limit by the consignee. An undischarged movement gives the consignor a presumption of release for consumption, and with it a recovery. Watch open ARCs as tightly as you watch open T1s. The suspension covers the excise, not the import duty. For non-Union goods you also need a customs procedure, such as warehouse or transit. Only once the goods are Union goods does the excise suspension remain on its own. Mixing those two layers is a classic error: a T1 to an AGP without arranging the excise status, or the other way around.
What is T2 excise?
T2 excise is the status of Union goods on which import duty has been paid, but excise has not. The goods may no longer leave the EU without export formalities, and they may not simply enter the market. They may lie under excise suspension or be moved. In practice you see this status with drinks and tobacco that go to an AGP after clearance, or with mineral oils that have not yet been released. The T2 document is a transport document for Union goods to or through a transit country. T2 excise as a status says something about the fiscal charge that is still open, not about the route. A load of whisky in a Dutch AGP has T2-excise status without a T2 document coming into play. For the declarant the distinction is operational. An import declaration that releases the goods into free circulation without excise suspension turns T1 into T2 free in one step, with excise due. An import declaration plus placement under excise suspension makes T2 excise.
How do you declare excise in DMS?
DMS retrieves the national excise code and the rate from the DTV at the goods code. You supply the quantity in the unit in which the rate is expressed: litres of pure alcohol, pieces, kilograms, or litres at a given temperature. A quantity in the wrong unit produces a wrong amount, even if the goods code is correct. For alcohol the strength is relevant, for oil the type and sometimes the use. Also state whether the goods remain under suspension or are released for consumption. That choice drives whether DMS calculates the excise as an amount due or as a suspended item. If the suspension is missing on the declaration while the goods are going to an AGP, the excise has already been charged before they arrive. Reversing that is an application for repayment, not a correction on the same declaration. Document codes and authorisation numbers belong on the item line. The AGP authorisation number, and on a movement the reference to EMCS, must match what happens physically.