Excise duties in France: Understanding the taxation of products subject to indirect duties

Excise duties are a special category of indirect taxes imposed on certain categories of consumer products, notably mineral oils, alcoholic beverages and manufactured tobacco. Governed by EU directives and the General Tax Code, these taxes play an important role in French taxation. This article aims to provide an overview of excise duties, including the procedures for economic operators, the categories of products concerned and how these taxes are applied.

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Definition and legislative framework for excise duties

What are excise duties?

Excise duties are indirect taxes imposed on certain categories of consumer products. They specifically target products such as mineral oils, alcoholic beverages and manufactured tobacco. These taxes are applied for a variety of reasons, notably to regulate consumption of these products and generate tax revenues.

Legislative and regulatory framework

The legislative framework governing excise duties is based on two main pillars: Community directives and the General Tax Code. Community directives harmonize tax rules within the European Union, guaranteeing consistent application of excise duties in the various Member States. The French General Tax Code, on the other hand, lays down the precise procedures for taxing, applying and collecting excise duties in France.

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Procedures for economic operators

Know the applicable tax rules

For economic operators, it is crucial to understand the taxes and excise duties that apply to the products they wish to market. Knowledge of tax rules for alcoholic beverages, mineral oils and manufactured tobacco is essential to avoid penalties and ensure that sales prices reflect actual costs. A good grasp of this information also makes it easier to plan the financial and logistical aspects of marketing.

Request for tax classification online via SOPRANO

Customs offers an online service called SOPRANO, designed to simplify administrative procedures for professionals. This service enables you to submit a tax classification request to determine the excise duties applicable to your products.

Theservice is available to any operator wishing to market a product in France.

When to applyIt's advisable to apply before the product is put on the market. This ensures accurate classification and avoids legal or financial complications later on. What's more, providing product samples facilitates the analyses required to establish tax classification. Using SOPRANO offers a fast, efficient method of managing these tax obligations, helping companies to comply with current regulations.

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Using GAMMA and GAMMA2 systems

The GAMMA (Gestion des Accises et de la Mobilité des Marchandises sous Accises) and GAMMA2 systems are essential for economic operators managing products subject to excise duty in France. These systems make it possible to track and declare the movement of these products, particularly those under duty suspension, in compliance with customs and tax regulations.

EMCS 4.1: A European evolution

The introduction of EMCS 4.1 (Excise Movement and Control System) represents a significant step forward in the computerization and management of excise movements within the European Union. EMCS enables products moving under excise duty suspension to be tracked using an electronic accompanying document (EAD), ensuring greater traceability and compliance.

New functionalities and management rules

1. Beers and degree Plato: For beers, entry of degree Plato is now compulsory if the member state of destination uses this measure for taxation purposes. Otherwise, it remains optional, except in the case of a change of destination to a state that applies the degree Plato.
2. Small independent producers: A new box (17v) has been added to declare the status of small producer, enabling better identification and management of independent brewers.
3. Ingredient labeling and nutrition declaration: For wine, box 17p ("Commercial description of the product") can now be used for ingredient labeling and nutrition declaration, in line with the new regulations.

GAMMA2-specific developments

1. Mandatory TAV: TAV (Titre Alcoolémique Volumique) is now mandatory for fully denatured alcohols (category S600).
2. PDF export of the certificate of receipt (CDR): The CDR can now be exported in PDF format, making it easier to document and track transactions.
3. Invoice price entry at €0: It is now possible to enter an invoice price of 0 euros, offering greater flexibility in declarations.

Practical use of GAMMA and GAMMA2 systems

Operators must use the GAMMA and GAMMA2 systems to declare movements of products subject to excise duty. GAMMA handles duty-suspended and duty-exempt movements, while GAMMA2 is used for duty-paid movements between traders within the EU.

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Categories of products subject to excise duty and tariffs

Excise duty on alcohol and alcoholic beverages

Excise taxes on alcohol and alcoholic beverages are specific taxes that apply to these products. Each year, these taxes are adjusted in line with theINSEE consumer price index (excluding tobacco), which means that rates may increase in proportion to inflation. The details of this taxation are set out in Section 3 of Chapter III of Book III of the Code of Taxes on Goods and Services (CIBS). This section defines the different categories of alcohol and alcoholic beverages, and the tax rates applicable to each.

Excise duty on manufactured tobacco products

Manufactured tobacco products are also subject to specific excise duties, and taxation varies according to geographical location:

• For products marketed on the mainland, taxation is defined in article L. 314-24 of the French Goods and Services Tax Code.
• For those marketed in Corsica, article L. 314-25 of the same code applies.
• Products sold in overseas departments are governed by article 268 of the French Customs Code.

These articles detail the specific excise duty rates for each region, taking into account the economic and logistical particularities specific to each.

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General and specific provisions

Taxable items and territories concerned

Articles L311-1 to L311-3 of the Code des impositions sur les biens et services specify the products subject to excise duty and the territories concerned by this taxation. These include energy products, alcoholic beverages and tobacco products. These articles also define the territories to be taxed, considering certain territories as distinct for the application of excise duties.

Chargeable event and chargeability of excise duties

Articles L311-4 to L311-6 describe the "fait générateur" of excise duties, i.e. the event that triggers the tax liability. This obligation may be linked to the production,importation or release for consumption of a product. The chargeability of excise duties, i.e. the moment at which the tax must be paid, is determined by these articles, specifying that the elements necessary to establish the excise duty must be assessed on the date it becomes chargeable.

Excise duties and exemptions

Articles L311-7 to L311-11 detail the amount of excise duty and the conditions for exemption. Certain products may be exempt from excise duty when they are shipped to third-party territories, used in diplomatic or consular relations, or consumed by non-French armed forces. These articles specify the limits and conditions under which these exemptions may be applied.

Release for consumption and suspension of excise duty

Articles L311-12 to L311-17 deal with the release for consumption of products subject to excise duty and the suspension of excise duty. Release for consumption includes leaving the excise suspension system and holding products outside the suspension system without excise duty having been paid. These articles also set out the conditions under which excise duty may be suspended and the procedures for reimbursing excise amounts when products are moved under suspension arrangements or rendered unusable.

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Benefits and use of the SOPRANO online service

Features and access

The SOPRANO online service offers a range of functions designed to simplify the management of tax and customs obligations for professionals. In particular, the platform enables users to submit applications for tax classification of excisable products such as spirits, alcoholic beverages and manufactured tobacco. Users can access various sections, including customs and tax authorization applications, in a completely paperless environment. SOPRANO offers an intuitive interface, making it easy for traders to access and navigate.

Simplified procedures

One of the main advantages of the SOPRANO platform is the dematerialization of administrative procedures. By enabling professionals to submit their tax classification requests online, SOPRANO eliminates the need to process paper forms and physically visit customs offices. This dematerialization considerably reduces processing times and administrative costs, while increasing the efficiency and accuracy of processes. What's more, users can track the progress of their applications in real time, ensuring greater transparency and optimized management of their tax obligations.

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Customs and tax procedures

Understanding excise duties and the associated procedures is crucial for economic operators wishing to market products subject to these taxes. The SOPRANO online service offers a practical and efficient solution to facilitate these administrative procedures, enabling compliance with tax obligations while simplifying the process. Excise duties, although indirect, play an important role in French taxation, and a thorough understanding of these taxes helps to navigate the regulatory framework efficiently.

For those wishing to learn more about indirect taxation and customs procedures, we invite you to read our article entitled CIBS explained: A new era for indirect taxation and customs procedures, available on our blog.