Spain Told To Amend Excise Duty Regime

The European Commission has formally requested Spain to modify its rules on excise duties to bring them into line with European Union (EU) legislation.

Under EU rules, all movement of excise goods under duty suspension within the EU must be accompanied by an electronic administrative document giving details about the goods, including information about their journey time to mitigate fraud.

A movement of excise goods can refer for example to moving goods from a tax warehouse in one European Union member state to a tax warehouse in another member state. Duty suspension is a temporary exclusion from paying excise duties. Goods that have not been submitted to excise duties must remain in an authorised "tax" warehouse for fiscal reasons.

The Spanish rules in question impose a 10% penalty on the excise duties of goods and a minimum fine of EUR600 (USD788) if:

• The time estimated by the operator for the transport of the excise goods is shorter than the time ultimately employed; and,
• The time difference is discovered by the tax authorities during the movement of the excise goods.

The Commission considers that a penalty imposed on the mere grounds that the estimated journey time is shorter than the one ultimately employed does not reflect the purpose and rationale of the Excise Movement Control System, which is aimed at triggering an investigation where transport between, for instance, tax warehouses takes excessively long. For this reason, the Commission has stated that the Spanish penalty rules are disproportionate.

The Commission has officially asked Spain to amend its legislation within two months. This request took the form of a ‘reasoned opinion’, which constitutes the second stage of infringement proceedings. In the absence of a satisfactory response within this time-limit, the Commission may refer Spain to the EU Court of Justice.

May 4, 2012

Source: Tax News

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