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Amendment of the Excise Duty Act – summary of planned changes part 2

Below is the second part summarizing the changes to the Excise Tax Law that were enacted on December 1, 2022. The first part of the collection of the most important planned amendments to the Excise Duty Act can be found at this link.

Tax warehouse

The legislator decided to make the regulation of the tax warehouse more precise in certain aspects and specifically indicated that an entity operating a tax warehouse in which it manufactures excise goods may store and transship excise goods covered by a permit to operate a tax warehouse therein, not only those manufactured by another entity, but also those manufactured by that entity in another tax warehouse, without having to meet the additional conditions for obtaining a permit referred to in Article 48(3) and (4) of the Act.

Small producer certificate

The reduced excise rate applied on the national territory, according to the new wording of the law, is no longer linked to the possession of a small producer certificate for alcoholic beverages, as they are no longer mandatory.

In the case of wine, provision is also made for a situation where it will not be possible to determine the average annual production. In such a case, the reduced rate applies to 3,000 hl of wine produced during (consecutive) three wine years (also taking into account the year in which this production is determined). At the same time, it should be noted that the indicated limit (3 000 hl) also takes into account previous production (if any).

The small producer will apply the reduced rate until the total wine production in a given year does not exceed 3,000 hl, taking into account the current year and the two previous wine years. When the total volume of wine production exceeds 3000 hl in the aforementioned period, then the basic tax rate, i.e. the rate referred to in Art. 95(4) of the Act.

Similarly, the provisions apply to fermented beverages and intermediate products with a threshold of 1,000 hl and 250 hl respectively.

Finally, it is worth pointing out that the amendment to the act defines a small wine producer as an entity which is legally and economically independent of other wine producers, has business premises in a separate location from other wine entrepreneurs, does not produce wine on the basis of licences obtained from other wine entrepreneurs and the volume of its average annual wine production does not exceed 1 000 hl.

ICS and small producer certificate

Although there is no obligation to have a small producer certificate, it will still be necessary in the case of a planned intra-Community supply in order to present it to the authorities of another EU country in order to benefit from the preferential rate there. This certificate will confirm the total annual production or, in the case of wine, the average annual production referred to in the relevant provisions of Council Directive 92/83/EEC and will confirm that the operator meets the other conditions of an independent small producer.

The Directive’s conditions must be met because different limits may apply in each EU country, so EU rules will have to be applied to enable the volume thresholds to be duly documented. The taxpayer will then be able to apply the reduced rate within the territory of the country to which he or she will be supplying alcoholic beverages.

A problematic situation may arise if the taxpayer exceeds the production limit in the country to which he supplies the goods, but the limit is still lower than that provided for in the Directive. Then, despite obtaining a certificate, he will not be entitled to benefit from the reduced rate in that country.

The possibility of obtaining a certificate will also be available to a small distillery (referred to in Article 22 of the aforementioned Council Directive 92/83/EEC), to which a Polish producer will deliver its products.

Excise duty and cigars & cigarillos

Tobacco products are subject to excise duty marking, and the bands applied to them in a given calendar year remain valid until the last day of February of the following calendar year. Cigars and cigarillos are temporarily exempt from the above regulations.

However, due to the fact that from 20 May 2024, the remaining excise goods, i.e. cigars and cigarillos, among others, will be covered by the Track & Trace system for tobacco products, these products will also be marked with excise stamps.

Currently, the law assumes that excise marks for cigars and cigarillos will be covered by the validity of Article 136(1) of the Act, i.e., within 24 months from the date of receipt of the marks, the entity will be obliged to affix them to wrappers and, in the case of importation and intra-Community acquisition, to import products bearing these marks into the territory of the country.

Therefore, cigars and cigarillos will not retain the validity inherent in tobacco products.

Hybrid vehicles

Under the current version of the law, the excise tax exemption for passenger cars that are hybrid vehicles has been extended until December 31, 2029 of the excise duty exemption for passenger cars that are externally-powered hybrid vehicles (‘plug-in’ vehicles) with an internal combustion engine capacity not exceeding 2,000 cc. The amendment became effective on December 31, 2022.

Electronic records and diesel fuel testing

The law also provides for an extension of the deadline until 1 January 2024 for the entry into force of the obligation to keep records in electronic form and to test diesel fuel placed marketed at filling stations and collected at company-owned stations in connection with the introduction of a new EU marker for heating fuels from 1 January 2024 and the several-month accreditation process for its testing by the laboratory of Office of Competition and Consumer Protection in Bydgoszcz related to the implementation of this tracer.

Excise security statements

The Act of 9 December 2021 initially provided for the addition of a new chapter 1aa to the Excise Act concerning the intra-Community movement of excise goods outside the excise duty suspension procedure using the System (as is the case under this procedure). Originally, the changes were planned to go into effect on January 1, 2023, but this has now changed.

In last year’s amendments, it was assumed that in a situation where intra-Community acquired excise goods are taxed on the territory of the country at an excise rate other than the zero rate, before the excise goods are moved out of the place of dispatch, there is an automatic record of the coverage of these goods by the entity’s lump-sum security, after the entity has provided a written declaration of excise security to cover the intra-Community acquired excise goods by this entity.

According to the actual form of the law, the aforementioned declaration will also be required prior to the automatic recording of the charging of the general security lodged by the authorised consignee on the territory of the country by the amount of excise duty or the amount of excise duty and fuel charge resulting from the quantity and type of excise goods moved intra-Community.

These changes will be effective from 13 February 2023.

ICA and the excise duty suspension procedure

According to the current version of the law, Article 78(3) of the Excise Act, which regulates the rules of intra-Community acquisition outside the excise duty suspension arrangement of excise goods, will be clarified. According to the new introduction to the enumeration, these goods will not include those listed in Article 40(7) of the Act, i.e. excise goods other than electricity, gas products, coal products and dried tobacco. The current wording raised considerable interpretation doubts, hence the proposed amendment, which is to take effect from 13 February 2023.

Intra-Community acquisition of excise goods for commercial purposes

Another of the changes relates to the ICA by a natural person of excise goods intended for commercial purposes. The provisions, which were originally intended to come into force at the beginning of 2023 meant that it was obligatory to make a declaration of the intended intra-Community acquisition, importantly, before the excise goods were introduced into the territory of the country, to submit a simplified declaration and to pay excise duty and lodge an excise security. However, as a problem was noticed, i.e. the impossibility of making a declaration of a planned WNT before it is made by a traveller, further changes were proposed.

According to the new wording, a traveller making an intra-Community acquisition of excise goods for commercial purposes within the meaning of Article 34 of the Act will only be required to submit a simplified declaration, calculate the excise duty and pay it within 10 days of the date on which the tax obligation arose (paragraph 4(1) in Article 78 of the Act).

In addition, for the intra-Community acquisition of non-harmonised excise goods, to which the excise duty suspension procedure applies in the territory of the country, the institution of a tax representative may not be used.

Implementation of the AIS/IMPORT system

Under the current wording of the law, there will also be a change in the effective date of regulations related to the implementation of the AIS/IMPORT System from January 1, 2023 to December 1, 2023.

However, this is still not the end of the changes – we will inform you about the next ones in the third – the last of the parts of the articles on the amendments to the Excise Act.