Please
tell me when the law changes
email:updateme@dutyfreebooze.com
Duty-free to your door ruling due
The case hinges on wine bought in France by a Dutch shopper
UK shoppers may be able to buy alcohol and cigarettes from Europe over the internet at bargain prices if the EU Court of Justice backs the move.
The court will decide this month if goods from EU states can be delivered to them in Britain free of UK duty.
An adviser to the court has already backed the change, which could mean reduced tax income for the UK Treasury.
But the Treasury, which wants the court to reject the earlier ruling, says the way it interprets duty laws is correct.
Booze cruise
An advocate-general, Francis Jacob, gave his independent legal advice and opinion to the EU court last December.
This is usually a good indication of the court's eventual decision, although it is not obliged to follow the advice. The judges will make their decision on 23 November.
If it follows its legal adviser it means shoppers will be able to order alcohol and cigarettes from overseas using their keyboard or phone.
It is very important to remember that the advocate-general's opinion is just that - an opinion
Treasury spokesman
There are large potential savings to be made from shopping for alcohol on mainland Europe, where there are lower alcohol and tobacco duty rates in many countries.
The big UK supermarkets have tried to cater for the British customer abroad - opening shops aimed specifically at the "booze cruise" market.
And the Wine and Spirits Trade Association said UK based retailers may "struggle to compete" on wine sales against nations such as France, where duty was minimal.
They could suffer under the new rules - but the Treasury could suffer more through loss of revenue.
Dutch action
The case comes down to where excise duty on alcohol and cigarettes should be charged. In general, it is chargeable in the member state of final destination.
However, a provision allows for excise duty on products "acquired by private individuals for their own use and transported by them" to be charged in the member state of purchase.
In the present case a private individual, resident in the Netherlands, purchased duty-paid wine in France for his own use. He did not transport the wine himself, but engaged a transport company to do so.
The Dutch tax authorities now wish to levy excise duty on the wine, and the UK government is supporting them in its action.
"We are confident that our interpretation of the law is the correct one," said a Treasury spokesman.
"Obviously we are watching the outcome of this case with great interest along with all the other interested parties.
"However, it is very important to remember that the advocate-general's opinion is just that - an opinion."
archive
European court may end duty on alcohol imports
Matthew Taylor and Riazat Butt
Monday November 13, 2006
The Guardian
UK shoppers may soon be able to order duty-free alcohol and cigarettes on the internet. The European court of justice will decide this month whether goods from EU countries can be delivered to British homes free of UK duty.
An adviser to the court has backed the change, which could mean a big drop in tax income for the Treasury, which wants the court to reject the advice. The Treasury argues that the way it interprets duty laws is correct.
Francis Jacob, the court's advocate general, gave his suggestions to the court last December and the court will give its verdict on November 23.
If the change goes ahead, shoppers will be able to order alcohol and cigarettes from countries in mainland Europe, where there are often lower alcohol and tobacco duty rates.
The leading British supermarkets have tried to cater for the British customer abroad - opening shops aimed specifically at the "booze cruise" market. But the Wine and Spirits Trade Association said UK-based retailers might struggle to compete on wine sales against countries such as France, where duty is minimal.
The case comes down to where excise duty on alcohol and cigarettes should be charged. In general, it is chargeable in the member country of final destination. But a provision allows for excise duty on products "acquired by private individuals for their own use and transported by them" to be charged in the country of purchase.
The case was brought by a group of Dutch wine enthusiasts who wanted to be able to buy wine from France for private consumption but were prevented from doing so unless one of them travelled to France to bring the delivery across the Dutch border.
Last night a Treasury spokesman said: "It is very important to remember that the advocate general's opinion is just that - an opinion." But the judges follow the advocate general's opinion in about 80% of cases before the court.
The British Retail Consortium has said such a move could hit British business hard unless excise duty rates are harmonised across the EU.
Some estimates suggest that booze cruises cost the Treasury more than £3bn a year in lost domestic tax revenue, with thousands of Britons taking advantage of a system that allows them to stock up and sail off with cheap alcohol and cigarettes.
The government makes about £15bn a year from excise on alcohol and cigarettes.
The EU judgment will come six months after the European commission's decision to end legal proceedings against Britain for cracking down on shoppers bringing in excessive quantities of alcohol and tobacco.
The Treasury crackdown was triggered by fears that shoppers were bringing in much more cheap drink and cigarettes than was justified by private consumption, selling it on and worsening revenue losses. These losses will look like small change compared with the sums involved if judges in the European court rule that the same regime should apply to amounts bought for personal use over the internet and through mail order.
Archive
EU rule could raise
spirit of drinkers
Ian Black in Brussels
Saturday April 3, 2004
The Guardian
Eurosceptics who
like a drop of the hard stuff, or even cheap plonk, will find it
hard to believe but there is good news from Brussels bureaucrats.
Under proposals from the European commission, drinkers in Britain
and across the continent should be able to buy as much bargain booze
as they like abroad - without even having to leave home.
And if Romano Prodi and his team get their way, millions of bon
viveurs will also be able to pay the lowest tax rate they can find
in six countries.
Finance ministries addicted to lucrative alcohol revenues may not
be so pleased. And since unanimity is needed, the plan may not get
very far.
Under the current rules shoppers have to travel in person to benefit
from lower tax alcohol shopping in other countries. In future, though,
they could get a friend or even a transport company to bring home
the booze.
The move would also apply to internet alcohol sales, as long as
customers organise the transport themselves rather than relying
on the retailer.
As with existing EU customs rules, these conditions only apply
if the alcohol is for personal use. In the past the commission has
used guidelines or "indicative limits" - 10 litres of spirits, 90
litres of wine and 110 litres of beer - to decide what counts as
personal use. Now it has proposed doing away with them altogether.
It also wants to allow EU citizens to pay excise duty at the rate
in the country where they buy their drink, rather than in the country
they take it to.
"You can visit a chateau in France, take a liking to the wine and
order a consignment to be delivered to your home state," said the
commission spokesman Jonathan Todd.
If the proposal is passed consumers will be able to buy wine in
Spain, Germany, Luxembourg, Italy, Greece and Portugal, all of which
have no excise duty on wine at all, and take it home with nothing
more to pay.
The move is likely to
be welcomed in Sweden and Denmark, both high-duty countries like
Britain, and also eurosceptically inclined. Whether it makes the
European commission any more popular remains to be seen.
Please tell me when
the law changes
email:updateme@dutyfreebooze.com |
