Brussels, 14/07/2003 (Agence Europe) - The European Commission decided on Monday to send a reasoned opinion to Germany asking it to stop applying reduced taxation to rolls of tobacco that can be made into cigarettes by the consumer. It believes that this practise violates directives on tax regimes applicable, which provide for such products to be taxed as cigarettes. In the absence of a satisfactory reaction within two months, the Commission could decide to bring the case to the Court of Justice.
The 1992 directive on alignment of taxes on cigarettes has led to a Community system of harmonisation for taxes on cigarettes. The idea of "cigarettes" was itself harmonised by the 1995 directive on taxes other than taxes on turnover affecting the consumption of manufactured tobacco products. It provides for "roles of tobacco which, by simple non-industrial manipulation, are inserted into cigarettes tubes" to be considered cigarettes. These two directives impose an identical taxation structure for cigarettes in all Member States. The system provides for mixed taxation uniting a specific proportion, i.e. a set amount per cigarette, and an "ad valorem" part proportionate to the sales price. The German tax authorities consider that tobacco roles- marketed in Germany under the name "West Single Pack"- allow the consumer to make cigarettes via a non-industrial manipulation, i.e. putting the tobacco rolls into paper cigarette tubes with a filter, which are sold separately are not cigarettes in the sense of the 1995 directive, but a fine grade of tobacco, which is taxed less heavily than cigarettes.