On Monday 8 July, the European Commission launched its evaluation process to decide whether or not to allow France to continue to apply a reduced rate of certain indirect taxes to rum known as “traditional” which is produced in Guadeloupe, French Guiana, Martinique and Réunion after 2020.
In France, rum produced in certain French Outermost Regions (ORs) has benefited from aid since 1923 in the form of reduced rates of excise duty in order to offset the increase in the cost of producing rum in the ORs and to guarantee access to the mainland market.
The Council Decision of 20 February 2014 authorises this tax derogation until 31 December 2020. In accordance with this decision, the Commission must therefore assess, before the end of 2020, whether the reasons that originally justified this derogation still exist.
The Commission will assess several options, including maintaining the current system unchanged, ending the derogation in 2020 or abolishing or amending the quotas and quantitative limits provided for.
If the assessment confirms that it is still justified for France to continue to apply reduced rates of excise duty on rum imported into metropolitan France after 2020, the Commission will propose an authorisation decision, replacing the 2014 authorisation decision, during the fourth quarter of 2019.
The Commission's roadmap on this subject is open for public consultation until 5 August. (Original version in French by Marion Fontana)