Changes to the European Directive on alcohol and alcoholic drinks

Changes to the European Directive on alcohol

As part of a broader project to modify and modernize the rules applicable to the taxation of excisable products in the European Union, the European Commission has approved and adopted Directive 115/2020 to modify Directive 92/83 CEE on the harmonization of the structure of excise duties on alcohol and alcoholic beverages.

Alin Negrescu

Tax Partner, Head of Automotive and Industrial Markets

KPMG in Romania


Directive 115/2020 was published in the Official Journal of the European Union on 5 August 2020, and its provisions should be transposed into Member States’ legislation by 31 December 2020.

In summary, the new rules involve, among other changes, the creation of a common framework for the certification of small, independent producers, a reduction in the minimum level of excise duties for the products made by these producers, as well as the harmonization of the rules on the measurement of Plato degrees.

What changes have been made to excise duties?

  • The rules have been revised for the conditions for applying exemptions for denatured alcohol, and the rules have been harmonized for the reciprocal recognition in Member States of completely denatured alcohol and for the procedures for denaturing.
  • The conditions have been restated for the reciprocal recognition of partially denatured alcohol, and it has been expressly stated that the maintenance and cleaning of production equipment form part of the production process, and that, consequently, partially denatured alcohol used in the production process should be exempted from excise duties.
  • A uniform approach has been established for the calculation of excise duties on beer, especially in relation to the measurement of Plato degrees. Specifically, for the measurement of Plato degrees for sweet or flavored beer, the new rules expressly state that the ingredients of beer which have been added after fermentation should also be taken into consideration for the purposes of measuring Plato degrees. Those Member States which up to now have not taken into consideration those ingredients which have been added after fermentation for the measurement of Plato degrees may apply the current methodology until 2030.
  • In order to encourage beer producers to be innovative and to create new products with lower alcohol concentration, the possibility has been introduced for the application of a lower excise duty, even below the minimum rate, for beer with a real alcohol by volume strength of no more than 3.5% vol.
  • The Commission has been given the authority to establish the model for the uniform certificate which attests the annual production of small, independent producers, and their compliance with the legal criteria, in order to reduce the administrative burden for this category of producers.
  • The provisions of the Directive have been updated to reflect the exit of Great Britain from the European Union, as well as the correspondence on the tariff classification, in accordance with the Common Customs Tariff applicable for 2019.

The changes to the Directive on alcohol and alcoholic drinks, as described above, come following proposals for modernization dating back to 2018, and also in the context of the recast of the Directive concerning the general arrangements for excise duty from the beginning of this year.

We can consequently expect further changes both at European level, particularly for energy products, as well as changes to national legislation in response to the European Commission’s initiatives.

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