The Cyprus Presidency of the Council of the EU has proposed that the Union rate used to determine the minimum excise duty for each product category be updated every three years, based on changes in the harmonised index of consumer prices in the Union, as published by Eurostat, in its latest compromise proposal, dated Wednesday 18 February (see EUROPE 13791/18).
This compromise proposal, seen by Agence Europe, will be discussed at the meeting of the EU Council Working Party on Tax Questions on Wednesday 25 February. The Presidency explained that it wanted to avoid the rate becoming obsolete over time. To avoid excessive fluctuations, each three-yearly adjustment should not exceed 6%. This adjustment to the EU’s Harmonised Index of Consumer Prices would take effect from 1 January 2035.
In the meantime, from 1 January 2028, the Presidency has suggested a transitional calculation formula, which also takes into account the price level index. It reports that “many Member States have serious objections regarding the powers given to the European Commission to adopt Delegated Acts”. It also prepared separate worksheets for cigarettes and fine-cut tobacco for rolling cigarettes.
In addition, at the request of certain Member States, Cyprus has drawn up a broader definition of electronic cigarettes, “in view of the rapid development of technologies”. As a result, the overall excise duty on e-cigarette liquids, whether or not they contain nicotine, will be at least 20% of the retail selling price inclusive of all taxes, or the EU rate of €0.30 per millilitre.
The Presidency explained that it had reinstated two categories of liquids, containing less or more than 15 mg of nicotine per millilitre, but had set the same minimum rate of excise duty in order to allow those Member States that so wished to impose excise duty on the basis of nicotine content, while maintaining the possibility for all other Member States to impose a single minimum flat rate on all e-cigarette liquids. (Original version in French by Anne Damiani with Camille-Cerise Gessant)