ESTA E.E.I.G.
Rond Point Schumanplein 9, box 1
B - 1040 Brussels
EC Reg. No: 0138855852-93
Ref. Ares(2019)5094142 - 05/08/2019
Ref. Ares(2020)771574 - 06/02/2020
Tel : +32 2 230 80 92
E-mail : xxxx@xxxx.xx
Website
: www.esta.be
Twitter: ESTA_EU
Revising the definition of Smoking Tobacco in Directive 2011/64/EU
A.
Why revising the definition of Smoking Tobacco (Art. 5 of Directive 2011/64/EU)?
Since the Ruling on the Eko-Tabak Case (C-638/15) in 2017, EU Member States have diverging
interpretations of Article 5(1)(a) of Directive 2011/64/EU. This results in many forms of
unmanufactured tobacco being treated as excisable products in certain Member States and not in
others. Such a non-harmonised fiscal treatment creates obstacles to the free movement of goods
and impedes the smooth functioning of the EMCS for excisable goods while increasing the burden
on all economic operators, and especially smaller and mid-sized companies.
The definition of smoking tobacco must ensure a harmonised application of the Directive throughout
the Union and provide legal certainty for both tax authorities and economic operators whilst allowing
for effective enforcement by the Member States. Excise duties are indirect taxes and, therefore, in
principle, are only applicable to products intended for sale to the consumer (to be distinguished from
raw materials intended for further manufacturing). The definition of smoking tobacco, therefore,
must enable Member States to levy excise duties on any tobacco product which is made available to
the final consumer (regardless of its characteristics) and avoid undue excise duties on
unmanufactured raw tobacco intended for further manufacturing.
B.
How the definition of Smoking Tobacco can be improved?
1. Amending Article 5(1)(a) to use the “put up for retail” clause (which already exists in Art. 5(1)(b))
as an additional cumulative condition for a tobacco product to be classified as smoking tobacco.
This amendment would clarify that:
o When made available to the consumer, any tobacco must be treated as smoking tobacco and
therefore subject to excise duties, regardless of its physical characteristics or ingredients;
o Raw/unmanufactured tobacco, when used exclusively for further manufacturing, would not
be subject to excise duties.
2. Introducing a new subparagraph Article 5(3) that further clarifies the “put up for retail” clause
and defines the conditions under which a tobacco product can be considered as put up for retail.
This definition would clarify that:
o Tobacco products, when proven to be at the disposal of a legitimate and authorised operator
in the supply chain, shall not be considered as put up for retail, and therefore, shall not be
considered as smoking tobacco.
However,
o Member States’ authorities have the discretion to determine whether a tobacco product is
put up for retail, based on the product’s presentation (when tobacco is prepared, conditioned
and intended for sale).
ESTA believes this amended definition will allow for a harmonised application of the Directive
throughout the Union, and therefore a harmonised application of the EMCS, avoiding unnecessary
administrative burden.
It will also provide legal certainty to tax authorities and all economic operators in the supply chain,
ensuring that products used for further manufacturing are not considered as excisable products.
Finally, it will ensure flexibility for the Member States’ authorities to levy excise duties on tobacco
products, when there is confidence that the products are destined to be sold to the consumer.
13/06/2019