EU Takes Croatia To Task On Excise Duty Regime

by Ulrika Lomas, Tax-News.com, Brussels

12 December 2016

The European Commission has asked Croatia to amend its rules for excise duty on alcohol distillates produced by small producers for their own consumption.

Currently, Croatia allows a reduced rate of excise duty to be applied to small producers who produce up to 20 liters of pure alcohol per household for their own consumption. A flat rate of excise duty is applied depending on the capacity of the boiler used for production.

The Commission said that because the reduced rate is linked to the capacity of the boiler and paid on a flat rate basis, regardless of the amounts produced, it does not comply with EU rules.

Alcohol excise duty rules are harmonized at the EU-level. Member states are permitted to grant a maximum 50 percent reduction of the normal excise duty rate to distillates made by small producers per year, if no more than 10 hectoliters of pure alcohol are produced.

Croatia has two months to inform the Commission of the measures taken to comply with its request. If it does not do so to the Commission's satisfaction, Croatia could be referred to the EU Court of Justice.

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