Council Decision (EU) 2020/1791 of 16 November 2020 authorising France to apply a reduced rate of certain indirect taxes on ‘traditional’ rum produced in Guadeloupe, French Guiana, Martinique and Réunion

Article 1

By derogation from Article 110 TFEU, France is authorised to extend the application on the French mainland, to ‘traditional’ rum produced in Guadeloupe, French Guiana, Martinique and Réunion, of a rate of excise duty lower than the full rate on alcohol set in accordance with Article 3 of Directive 92/84/EEC and of a rate of the levy called ‘ cotisation sur les boissons alcooliques ’ (VSS) lower than the full rate applicable according to the national legislation.

Article 2

The derogation set out in Article 1 of this Decision shall apply to rum as defined in point 1(f) of Annex II to Regulation (EC) No 110/2008 of the European Parliament and of the Council ( 4 ) until 24 May 2021 and to rum as defined in point 1(g)(i) of Annex I to Regulation (EU) 2019/787 of the European Parliament and of the Council ( 5 ) as of 25 May 2021, produced in Guadeloupe, French Guiana, Martinique and Réunion from sugarcane harvested at the place of manufacture, having a content of volatile substances other than ethyl and methyl alcohol equal to or exceeding 225 grams per hectolitre of pure alcohol and an alcoholic strength by volume of 40 % or more.

Article 3

   The reduced rates of excise duty and of VSS referred to in Article 1 and applicable to the rum referred to in Article 2 shall be confined to an annual quota of 153 000 hectolitres of pure alcohol.
   The reduced rates of excise duty and of VSS referred to in Article 1 of this Decision may each be lower than the minimum rate of excise duty on alcohol set by Directive 92/84/EEC, but shall not be more than 50 % lower than the full rate on alcohol set in accordance with Article 3 of Directive 92/84/EEC or the full rate on alcohol for the VSS.
   The cumulative fiscal advantage authorised in accordance with paragraph 2 of this Article shall not be more than 50 % of the full rate on alcohol set in accordance with Article 3 of Directive 92/84/EEC.

Article 4

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

Article 5

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

Article 6

This Decision is addressed to the French Republic.

ANNEXINFORMATION TO BE INCLUDED IN THE MONITORING REPORT REFERRED TO IN ARTICLE 4

ANNEX
INFORMATION TO BE INCLUDED IN THE MONITORING REPORT REFERRED TO IN ARTICLE 4
1.
Estimated additional costs. Information shall be provided for each type of rum (‘agricole rum’ and ‘sucrerie rum’) benefiting from the reduced rate of the relevant indirect taxes. The French 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 to evaluate the additional cost faced by the producers in the French outermost regions.
Table 1
Guadeloupe (EUR)
French Guiana (EUR)
Martinique (EUR)
Réunion (EUR)
Notes (3)
Sugarcane price (per 100 kg)
Molasses price (per 100 kg)
Freight cost (per kg)
Workforce (per hlpa (1) )
Other inputs (per hlpa (1) )
Depreciation costs
Compliance costs
Other costs (2)
Notes to Table 1:
( 1 )
Hectolitres of pure alcohol.
( 2 )
Provide information on water, energy and waste-related costs, other relevant costs.
( 3 )
Provide information on all the specifications and clarifications underpinning the calculation methods.
2.
Other subsidies. The French authorities shall complete Table 2, listing all other aid and support measures addressing the additional operating costs of economic operators linked to the outermost region status.
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 information on the identification and the type of measure (programme, State aid number etc.).
( 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 French 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 French authorities shall complete Table 4 providing any data demonstrating the impact of the reduced rate of the relevant indirect taxes on the socioeconomic development of the French outermost regions. The indicators required in Table 4 refer to the performance of the rum sector compared to the general performance in the regional economy. If some of the indicators are not available, alternative reporting data shall be included on the overall socioeconomic performance of the French outermost regions.
Table 4
Year (1)
2019
2020
2021
2022
2023
2024
Notes (2)
Regional gross value added
In the rum sector
In the cane-sugar-rum sector
Employment in local distilleries
Employment in the cane-sugar-rum sector
Unemployment rate
Number of active enterprises
Number of rum producers (including SMEs)
Sugarcane cultivation area (ha)
Price level index – French mainland
Price level index – regions
Number of tourists – regions
Number of tourists – distilleries
Notes to Table 4:
( 1 )
The information might not be available for all the years listed.
( 2 )
Provide comments and clarifications as deemed relevant.
5.
Specifications of the regime. The French authorities shall complete Table 5 for each type of rum (‘agricole rum’ and ‘sucrerie rum’) and by region (Guadeloupe, French Guiana, Martinique and Réunion). If some of the indicators are not available, alternative reporting data shall be included on the specifications of the regime.
Table 5
Quantity (in hlpa (1) )
2019
2020
2021
2022
2023
2024
Rum production
Traditional rum production
Local sales of rum
Rum dispatched to the French mainland
Traditional rum dispatched to the French mainland
Traditional rum dispatched under the derogation
Rum dispatched to other Member States
Rum exported to third countries
Rum as a percentage of total extra OR-exports (%)
Share of French traditional rum in the French mainland rum market (%)
Rum market growth rate in the French mainland (%)
Spirits market growth rate in the French mainland (%)
Note to Table 5:
( 1 )
Hectolitres of pure alcohol.
6.
Irregularities. The French authorities shall provide information on any investigations on administrative irregularities, on evasion of the relevant indirect taxes, and on smuggling of the alcoholic products concerned in the context of the application of the authorisation. They shall provide detailed information, including at least information on the nature of the case, value and time period.
7.
Complaints. The French 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.

Council Decision (EU) 2020/1791 of 16 November 2020 authorising France to apply a reduced rate of certain indirect taxes on ‘traditional’ rum produced in Guadeloupe, French Guiana, Martinique and Réunion

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