Council Decision (EU) 2020/1790 of 16 November 2020 authorising Portugal to apply a reduced rate of excise duty on certain alcoholic products produced in the autonomous regions of Madeira and of the Azores

• CELEX: Decision (EU) 2020/1790
• Articles: 9

Article 1

By way of derogation from Article 110 TFEU, Portugal is hereby authorised to apply a rate of excise duty lower than the full rate on alcohol set in accordance with Article 3 of Directive 92/84/EEC in the autonomous region of Madeira on locally produced and consumed rum and liqueurs and in the autonomous region of the Azores on locally produced and consumed rum, liqueurs and eaux-de-vie.

Article 2

By way of derogation from Article 110 TFEU, Portugal is hereby authorised to apply a rate of excise duty lower than the full rate on alcohol set in accordance with Article 3 of Directive 92/84/EEC on rum and liqueurs produced in the autonomous region of Madeira when consumed on mainland Portugal and on rum, liqueurs and eaux-de-vie produced in the autonomous region of the Azores when consumed on mainland Portugal.

Article 3

1.   In the autonomous region of Madeira the authorisation set out in Articles 1 and 2 shall be limited to the following products:

(a)

until 24 May 2021, to rum as defined in point 1 of Annex II to Regulation (EC) No 110/2008 of the European Parliament and of the Council  ( 4 ) , having the geographical indication ‘Rum da Madeira’ referred to in point 1 of Annex III to that Regulation, and from 25 May 2021, to rum as defined in point 1 of Annex I to Regulation (EU) 2019/787 of the European Parliament and of the Council  ( 5 ) , having the geographical indication ‘Rum da Madeira’;

(b)

until 24 May 2021, to liqueurs and ‘crème de’ as defined in points 32 and 33 respectively of Annex II to Regulation (EC) No 110/2008, produced from regional fruit or plants, and from 25 May 2021, to liqueurs and ‘crème de’ as defined in points 33 and 34 respectively of Annex I to Regulation (EU) 2019/787, produced from regional fruit or plants.

2.   In the autonomous region of the Azores, the authorisation set out in Articles 1 and 2 shall be limited to the following products:

(a)

until 24 May 2021, to rum as defined in point 1 of Annex II to Regulation (EC) No 110/2008, produced from regional sugarcane, and from 25 May 2021, to rum as defined in point 1 of Annex I to Regulation (EU) 2019/787, produced from regional sugarcane;

(b)

until 24 May 2021, to liqueurs and ‘crème de’ as defined in points 32 and 33 respectively of Annex II to Regulation (EC) No 110/2008, produced from regional fruit or raw materials, and from 25 May 2021, to liqueurs and ‘crème de’ as defined in points 33 and 34 respectively of Annex I to Regulation (EU) 2019/787, produced from regional fruit or raw materials;

(c)

until 24 May 2021, to eaux-de-vie made from wine or grape marc having the characteristics and qualities as defined in points 4 and 6 of Annex II to Regulation (EC) No 110/2008, and from 25 May 2021, to eaux-de-vie made from wine or grape marc having the characteristics and qualities as defined in points 4 and 6 of Annex I to Regulation (EU) 2019/787.

Article 4

The reduced rate of excise duty applicable to the products referred to in Article 1 of this Decision may be lower than the minimum rate of excise duty on alcohol set by Directive 92/84/EEC, but may not be more than 75 % lower than the standard national excise duty on alcohol.

Article 5

The reduced rate of excise duty applicable to the products referred to in Article 2 of this Decision may be lower than the minimum rate of excise duty on alcohol set by Directive 92/84/EEC, but may not be more than 50 % lower than the standard national excise duty on alcohol.

Article 6

By 30 September 2025 at the latest, Portugal shall submit a monitoring report to the Commission to enable it to assess whether the conditions justifying the authorisation set out in Articles 1 and 2 continue to be fulfilled. The monitoring report shall contain the information set out in the Annex.

Article 7

This Decision shall apply from 1 January 2021 until 31 December 2027.

Article 8

This Decision is addressed to the Portuguese Republic.

Schedules & Appendices

ANNEX Information to be included in the monitoring report referred to in Article 6

ANNEX

Information to be included in the monitoring report referred to in Article 6

1.

Estimated additional costs. Information shall be provided for each product benefiting from the reduced rate of excise duty. The Portuguese authorities shall complete Table 1 with at least the following information, where such information is available. The information provided in Table 1 shall be sufficient for determining whether there is additional cost, which increases the cost of products produced locally in comparison to products produced elsewhere.

Table 1

MADEIRA (EUR)

AZORES (EUR)

Notes (3)

Sugarcane price (per 100 kg)

Passion fruit price (per 100 kg)

Lime fruit price (per 100 kg)

Alcohol price (per hlpa (1) – excluding taxes)

Freight cost (per kg)

Other costs (2)

Notes to Table 1:

(1)

Hectolitres of pure alcohol.

(2)

Provide information on water, energy and waste-related costs, costs in case of multiple establishments and other relevant costs.

(3)

Provide information on all the specifications and clarifications underpinning the calculation methods.

2.

Other subsidies. The Portuguese authorities shall complete Table 2 for each region listing all other aid and support measures addressing the additional operating costs of economic operators linked to the outermost status of the autonomous regions of Madeira and of the Azores.

Table 2

Aid/support measure (1)

Period (2)

Target sector (3)

Budget amount in EUR (4)

Annual expenditure, in EUR (2019-2024) (5)

Share of the budget attributable to additional costs compensation (6)

Estimated number of beneficiary firms (7)

Notes (8)

[list]

Notes to Table 2:

(1)

Provide the denomination and the type of measure.

(2)

Provide information on years covered by the measure.

(3)

Provide information only for sector-oriented measures.

(4)

Provide information on the overall budget of the measure and the sources of funding.

(5)

Provide information on actual expenditure year by year in the monitoring period (2019-2024), where available.

(6)

Provide approximate estimation, as a percentage of the overall budget.

(7)

Provide approximate estimation, where feasible.

(8)

Provide any comments and clarifications.

3.

Impact on public budget. The Portuguese authorities shall complete Table 3 providing the estimated total amount (in EUR) of tax not collected because of the tax differentials applied.

Table 3

2019

2020

2021

2022

2023

2024

Foregone tax revenue

4.

Impact on overall economic performance. The Portuguese authorities shall complete Table 4 for each region providing any data demonstrating the impact of the reduced excise duties on the socioeconomic development of those regions. The indicators required in Table 4 refer to the performance of the supported sector compared to the general performance in the economy of Madeira and in the economy of the Azores. If some of the indicators are not available, alternative reporting data shall be included on the impact on overall economic performance allowing analysis of the socioeconomic impact.

Table 4

Year (1)

2019

2020

2021

2022

2023

2024

Notes (3)

Regional gross value added

In the supported sector (2)

Overall regional employment

In the supported sector (2)

Number of active producers

In the supported sector (2)

Price level index – mainland Portugal

Price level index of the region

Number of tourists of the region

Notes to Table 4:

(1)

The information might not be available for all the years listed.

(2)

Provide information on producers of rum, liqueurs and eaux-de-vie.

(3)

Provide comments and clarifications as deemed relevant.

5.

Specifications of the regime. The Portuguese authorities shall complete Table 5 for each product and for each of the autonomous regions of Madeira and of the Azores.

Table 5

Quantity (in hlpa (1) )

2019

2020

2021

2022

2023

2024

Liqueurs production

Eaux de vie production

Rum production

Liqueurs dispatched to mainland Portugal

Liqueurs dispatched to other Member States

Liqueurs exported to third countries

Eaux de vie dispatched to mainland Portugal

Eaux de vie dispatched to other Member States

Eaux de vie exported to third countries

Rum dispatched to mainland Portugal

Rum dispatched to other Member States

Rum exported to third countries

Note to Table 5:

(1)

Hectolitres of pure alcohol.

6.

Irregularities. The Portuguese authorities shall provide information on any investigations on administrative irregularities, in particular, on evasion from taxes or smuggling, in the context of the application of the authorisation. They shall also provide detailed information, including at least information on the nature of the case, value and time period.

7.

Complaints. The Portuguese authorities shall provide information on whether the local, regional, or national authorities have received any complaints concerning the application of the authorisation, either by beneficiaries or by non-beneficiaries.