Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on...

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Excise duty March 4th 2011

Transcript of Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on...

Page 1: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

Excise duty

March 4th 2011

Page 2: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• Act nr. 97/1987 on excise duty - general provisions:• Special acts on excise duty:

• Alcohol and tobacco – Act nr. 96/1995• Vehicles and fuel – Act nr. 29/1993• Oil and kilometre – Act nr. 87/2004• Liquid fossil fuels, electricity and hot water – Act

nr. 129/2009

Excise duty

Page 3: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• The excise duty applies to all products, new and used, imported to the country or produced, processed, or packed in the country and classified in the annex in the Act. Exported goods are not taxable.

The scope

Page 4: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• Act no. 96/1995 on excise duty on alcohol and tobacco

• Traveller allowance• Alcohol

a. 1 litre of strong alcohol and 1 litre of wine or,b. 3 litre of wine, orc. 1 litre of strong alcohol or 1,5 litre of wine and 6 litre of

beer.

• Tobaccoa. 200 cigarettes or 250 gr. of other tobacco.

Travellers

Page 5: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• Customs Act no. 88/2005• Traveller allowance on other products

a. Up to 408 EU (65.000 ISK) based on the retail price at the place of purchase

b. The value of individual purchase however may not exceed 204 EU (32.500 ISK)

Travellers

Page 6: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• 4 Duty free shops

• Arrival and departure shop in the airports

• Alcohol is subject to 10% and tobacco to 40% excise duty in arrival shop. No duty in the departure stores.

Duty free

Page 7: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• Gap analysis:

• There is a difference between Icalnad and EU concerning traveller allowance.

• The duty free shop at the arrivals is different from EU system

Excise duty - Summary -

Page 8: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

Alcohol

Page 9: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• Act no. 96/1995 on excise duty on alcohol and tobacco

•Alcohol is defined as any liquid that contains more than 2.25% of alcohol by volume.

• The State Alcohol and Tobacco Company of Iceland (ÁTVR) is a monopoly in sales of alcohol in Iceland.

Alcohol

Page 10: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• The excise duty is to be calculated proportionally on the fraction of cl. of alcohol and fraction of liters of the alcoholic beverage.

• Excise duty on alcohol is as follows on each cl. of alcohol in each litre.• Of ale containing more than 2.25% alcohol, and of goods which

contain blended ale and non-alcohol beverages: 0,54 EUR (86,90 ISK)

• Of wine and fermented beverages: 0,49 EUR (78,15 ISK)• Other alcohol: 0,64 EUR (101,74 ISK)

Tax base

Page 11: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• Taxable under this Act are those who import or produce alcohol in this country for sale or processing.

• Taxable are also those who bring with them to the country liquor for personal use, such as those who receive alcohol from abroad without a sale or processing. It is Authorized to restrict imports under to certain types of products, maximum quantity or maximum value and to set conditions for who may enter under her.

Taxable entities

Page 12: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

Beer 1ltr Cl.: 2,75 Excise duty: 1,5 EUR (239 ISK)

Wine 1ltr Cl.: 14,75 Excise duty: 7,22 EUR (1.153 ISK)

Strong 1ltr Cl.: 44,00 Excise duty: 28,03 EUR (4.477 ISK)

Example of prices

Page 13: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

Sold alcohol litres

Alcohol litres sold

0

5.000

10.000

15.000

20.000

25.000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Page 14: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

State alcohol revenues

Revenues

0 EUR

10.000 EUR

20.000 EUR

30.000 EUR

40.000 EUR

50.000 EUR

60.000 EUR

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Page 15: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

Alcohol revenues as % of GDP

Excise duties on alcohol as % GDP

0,00

0,10

0,20

0,30

0,40

0,50

0,60

0,70

0,80

0,90

1,00

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Page 16: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• Excise duty on alcohol is to be paid in custom• Of alcohol produces that is marketed in Iceland, the

duty is to be paid on sale or at the delivery of the product from factory/producer to the buyer

Time of payment

Alcohol product from producer Buyer

Excise duty

RSK

Excise duty

Page 17: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• Excise duty is to be waived or refunded in the following occations:

• On sale out of Iceland• On import or sale to diplomats• Of alcohol witch is registered in pharmacopoeia, to doctors or

pharmacies for sale for medical purpose • On import and sale of alcohol duty-free shops and duty-free stocks.

Furthermore, of alcohol where the duty has been paid, but is later sent abroad, to a duty free shop, a customs warehouse, the duty free depot storage or free zone or destroyed under customs supervision.

Exemptions

Page 18: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

Ships crew membersLess than 15 days: 0.75 liters of spirits and 1,5 liters of wine, or 0.75 liters of spirits or wine and 12 liters of beer.

More than 15 days: 1.5 liters of spirits and 3 liters of wine, or 1.5 liters of spirits or wine and 24 liters of beer.

Air crew membersLess than 15 days: 0.375 liters of spirits and 0.75 liters of wine, or 0.375 liters of spirits or 0.75 liters of wine and 3 liters of beer.More than 15 days: 1 liter of spirits and 0.75 liters of wine, or 1 liter of spirits or 0.75 liters of wine and 6 liters of beer.

Exemptions

Page 19: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• Difference in definitions on alcohol • The tax base is different• Crew member exemptions?

Gap analysis

Page 20: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

Tobacco

Page 21: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• Act no 96/1996 on Excise duty on Alcohol and Tobacco

•Tobacco is defined as any goods classified in tariff headings listed in chapter 24 of Annex I to Act. no. 55/1987 on customs. Defined as cigarettes, cigars and other tobacco.

•ÁTVR collects excise taxes on tobacco which are imported to the country or produced in the country.

•ÁTVR labels every product in accordance with tobacco defense act.

Tobacco

Page 22: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• Special tobacco tax

• 2,72 EUR (437.00 ISK) on each pack of 20 cigarettes

• 0,14 EUR (21.85 ISK) pr. gr. on cigars and other tobacco

• VAT 25,5%

Tax amount

Page 23: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

Sold tobacco

Sold tobacco

0

200.000

400.000

600.000

800.000

1.000.000

1.200.000

1.400.000

1.600.000

1.800.000

2.000.000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Cigarettes (carton)

Cigars (packs of 10)

Page 24: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

Sold tobacco

Sold tobacco

0

5.000

10.000

15.000

20.000

25.000

30.000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Smoking tobacco (kg)

Other tobacco (kg)

Page 25: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

State tobacco revenues

Revenues

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

5.000

2001 2002 2003 2004 2005 2006 2007 2008 2009

Page 26: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

Excise duty on tobacco as % of GDP

Excise duty on tobacco as % of GDP

0,00

0,05

0,10

0,15

0,20

0,25

0,30

0,35

0,40

0,45

2001 2002 2003 2004 2005 2006 2007 2008 2009

Page 27: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• Travellers – 200 cigarettes or 250 gr. other tobacco

Ships crew members• Less than 15 days: 200 cigarettes or 250 gr. tobacco• More than 15 days: 400 cigarettes or 500 gr. tobacco

Air crew members• Less than 15 days: 100 cigarettes or 125 gr. tobacco• More than 15 days: 200 cigarettes or 250 gr. tobacco

• Diplomatic employees

Exemptions

Page 28: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

1. ÁTVR orders cigarettes or other tobacco from wholesaler

2. Wholesaler orders from producer abroad3. Cigarettes imported to the country4. Wholesaler sends import documents to customs

and pays 25,5% VAT to customs5. Employer of ÁTVR goes to the warehouse and

brings the tobacco to ÁTVR warehouse6. ÁTVR sells the tobacco to retailers of tobacco7. ÁTVR pays on the 5th. of next month the tobacco

excise duty to Directorate of Customs

Import procedure

Page 29: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• ÁTVR manufactures a small amount of snuff for inland market (approx. 25.000 kg. a year)

• Imports raw tobacco through wholesalers

• Manufactures it and packs in its own warehouse

• Sells it to retailers

Snus/ Snuff

Page 30: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• Difference in traveller allowance • Difference in definitions on tobacco • Crew member exemptions?

Gap analysis

Page 31: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

Vehicles and fuel

Page 32: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• Act nr. 29/1993 on excise duty on vehicles , petroleum etc.

•A excise duty shall be paid to the State Treasury on vehicles which are subject to registration in accordance with the Traffic Law, No. 50/1987, et al. and petroleum listed in the tariff heading list I.

Vehicles and fuel

Page 33: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• Vehicles• Excise duty shall be levied based on their registered emissions of carbon dioxide ( CO2), measured in grams per kilometer driven

• Petroleum• General tax 0,15 EUR (23,86 ISK) pr. litre•Special petroleum tax : Unleaded fuel 0,24 EUR (38,55 ISK) pr. litre and on other fuel 0,25 EUR (40,55 ISK)• The revenue from the special petroleum tax earmarked for road construction

Tax amount

Page 34: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

•Of imported product the tax base is their custom duty as decided ac. to chapter V in the customs act plus the duty as they are decided in the customs act

•Of locally produced products the tax base is the retail price from producer without excise duty to independent person

•The duty is collected in custom on imported products

•Of locally produced products the collected in either sale or delivery from producer or retailer

Tax base

Page 35: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

•Petrol that will be used or demonstrably been used in aircraft shall be exempt from excise duty.

•If the petrol is blended with additives that are not of mineral origin that part is exempt from excise duty.

•Foreign embassies and diplomatic agents shall be reimbursed the ad volerum duty and the special excise tax on fuel for vehicles owned by them.

Exemptions

Page 36: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

Excise duty on oil

Page 37: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

•Act nr. 87/2004 on excise duty on oil and kilometre duty

•Excise duty is to be paid of gas and diesel oil that is usable as fuel for vehicles.

•Charging includes oil which has been blended taxable oil, provided the mixtures suitable for use as fuel for vehicles.

•The amount of oil charge is 0,34 EUR (54.88 ISK) per liter of oil.

Excise duty on oil

Page 38: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• Oils which are not of mineral origin should be exempt from excise duty

• Taxable entities may sell or supply oil under without oil charge collection in the following cases:

• For use on ships• For home heating and heating public swimming pools• For use in industry and on construction vehicles• For use on tractors• For electricity production• For use on vehicles intended for specific use and burn diesel fuel mostly standstill• For use the belt cars and vehicles were used exclusively off-road or in enclosed

workspaces • For use on cars owned by rescue teams.

Exemptions and refunds

Page 39: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• Conditions of sale or delivery of oil without payment under oil charge is that the oil has been added colors and logo materials

• Only those who have received permission from the Internal Revenue Authority is authorized to add color and/or label products in gas and diesel fuel under the Act

• Those who are patent to run scheduled buses shall be returned 85% of the oil charge of oil for the operation of scheduled buses.

• Oil charge is to be refunded on oil that is used on cars owned by foreign embassies

Exemptions and refunds

Page 40: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

Liquid fossil fuels, electricity and hot water

Page 41: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

Liquid fossil fuels- General -

•Act on environmental and resource taxes nr. 129/2009

• Carbon tax on fossil fuels. Liquid fossil fuels means a gas-and diesel fuel, gasoline, aircraft and jet fuel and fuel oil.

Page 42: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

Liquid fossil fuels- General -

•Fixed carbon tax:

• 0,03 EUR (4.35 ISK) per liter of gas and diesel fuel• 0,02 EUR (3.80 ISK) per liter of gasoline, • 0,03 EUR (4.10 ISK) per liter of aircraft and jet fuel, and

• 0,04 EUR (5.35 ISK) per kilogram of fuel oil.

Page 43: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

Electricity and hot water- General -

• Fixed tax is on electricity and hot water:

1. The amount of tax on electricity is 0.12 ISK. per kilowatt hour (kWh) of electricity sold.

2. Tax amount of hot water should be 2% of the retail price of hot water.

Page 44: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

Exemptions

• Exempt from taxation are those who sell electricity or hot water for less than 3.111 EUR (500.000 ISK) per year.

• Taxable sale or supply does not include:

1. Electricity or hot water delivered to other taxable entities.

2. Electricity or hot water delivered or used only for producing electricity or hot water for resale

Page 45: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

• Several differences between induvidual tax bases. This needs to be scrutinised.•Broader exemptions in the EU regulations

Gap analysis

Page 46: Excise duty March 4th 2011. Act nr. 97/1987 on excise duty - general provisions: Special acts on excise duty: Alcohol and tobacco – Act nr. 96/1995 Vehicles.

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