Brussels, 31/10/2006 (Agence Europe) - Last week representatives from Member States discussed two compromise proposals by the Finnish presidency on taxation in two cases on the agenda of the next finance ministers' meeting on Tuesday 7 November. The first proposal focuses on minimum excise rates on alcoholic drinks (EUROPE 9261), the second focuses on tax thresholds for goods taken by travellers entering the European Union (EUROPE 9140). One diplomatic source said that a political agreement is not envisaged next Tuesday for these two dossiers requiring unanimity.
Alcoholic drinks. This draft directive aimed to increase excise rates for alcohol on 1st January 2008, as well as for intermediate products and alcoholic drinks, in an effort to take inflation into account. Since adoption of directives 92/84/EEC and 93/84/EEC in 1992, this inflation has been assessed at 31% by Laszlo Kovacs' services, the Commissioner in charge of taxation.
The Finnish presidency's compromise proposal differs from the initial Commission proposal insofar as it suggests extending transition periods for Member States by a year. When the increase of minimum rates is less than 20%, the transition period proposed would end on 1 January 2010. In the even of a rise above 20%, this transition period would continue till 1 January 2011. Several delegations are not convinced by the Finnish Presidency's approach concerning the transitional periods envisaged. Countries that produce beer, especially Germany and the Czech Republic, are opposed to the minimum rates suggested for this beverage. One delegation is said to be clamouring for permanent dispensation.
Goods entering the EU. The draft directive aims to adjust the thresholds of Directive 69/169/EEC on tax exemption for goods contained in personal luggage entering the European Union. It establishes, updates or abolishes the quantity limits for certain products such as alcoholic drinks, coffee or perfume.
The Finnish Presidency suggests that the distinction made by the Commission between travellers entering Community territory by air and those entering by overland or maritime transport means should be abolished. It therefore recommends that there be a single threshold fixed at €300, almost twice the present €175 threshold.
Member States that have land borders with third countries where taxation is lower are calling for the threshold to be reduced, while the United Kingdom is calling for a €500 threshold to be imposed so that its customs officers may focus their efforts on serious cases of fraud. There is not unanimity as one Member State among the five concerned is still opposed to abolishing quantitative limits on coffee. Neither is there unanimity when it comes to the Commission's proposal to differentiate with regard to quantitative limits of tobacco depending on the transport method used. (mb)