Excise duty, like VAT, is an indirect tax, but it is not universal and is applied only to certain categories of products. It is included in the selling price of the goods, and therefore the costs associated with it are borne by the buyer. Depending on the type of alcohol, its amount is different.

When is it necessary to pay excise duty?

The withholding of excise duty is one of the obligations of producers and importers of excise goods. The activities requiring the payment of excise duty are:

  • production of excise goods,
  • trade in excise goods within the territory of the country,
  • export and import of products,
  • intra-community acquisition and delivery,
  • taking harmonized goods out of a tax warehouse,
  • acquisition or possession of excise goods on which excise duty has not been paid,
  • losses or shortages of harmonized excise products.

Harmonized and non-harmonized products

In the Excise Tax Act, there is a division into harmonized and non-harmonized products. The first group includes tobacco and alcohol products, fuels, heating oils, gas and electricity. The second group includes other products, such as weapons, cosmetics and passenger cars.

Tax base and the process of determining the tax rate

If the excise duty rate is expressed as a percentage, then in the case of import, the taxable amount is the customs value of the products, plus the duty due. When dealing with an intra-Community supply, the amount due for the supply of goods within the territory of a Member State is taken into account, and in the case of intra-Community acquisition, the amount that the buyer is required to pay for the goods is important. The taxable amount is also the amount due for sales in the country of origin of the products, less tax on goods and services and excise duty on them.

If the rates are fixed in terms of amounts, the quantity of goods is taken into account.

The Member States of the European Union are obliged to apply minimum amounts of tax for specific products, but each country may apply higher rates, adjusted to its own policy. The tax rates for excise goods are set out in the Excise Duty Act and may be expressed in various ways, for example in the amount per unit of a given good or as a percentage. The amount of excise duty may change with each year.

Amendment to the act on excise duty

At the end of October 2021, a draft amendment to the Excise Duty Act was presented. New regulations assuming an increase in tax entered into force on January 1, 2022. According to them, the excise duty rates for alcohol increased by 10% compared to the previous year. Therefore, you can expect an increase in the prices of products on store shelves. It is expected that the price of vodka with an alcohol content of 40% will increase by PLN 1.50, the price of a dry wine bottle (0.75 l) by approximately PLN 0.16, and a half-liter can of beer will be PLN 0.06 more. However, experts say the price increase will be even greater due to higher labor costs and rising production prices. Moreover, the act proposes that in the years 2023-2027 the excise tax should be increased every year by another 5%. As a result, in 2022, the state budget should receive PLN 2 billion, and after 10 years this amount should amount to PLN 103 billion. The excise tax increase both in 2022 and in the next five years does not only apply to cider and perry with an alcohol content of up to 5%.

The decision to increase the excise duty is based on the relatively low prices of alcoholic beverages in Poland compared to the EU average. You can only buy cheaper alcohol in Bulgaria, Hungary and the Czech Republic. These activities are pro-health in nature and their aim is to reduce the negative health effects caused by the consumption of alcohol and tobacco products and to shape good habits of citizens.

Excise tax reduction for small producers

The new regulations also provide for special conditions for small, independent producers of alcoholic beverages. The solution is to reduce the excise duty rate on their products by as much as half of the standard rates. It is planned to introduce a definition of such an enterprise into the act. Fruit producers' distilleries, small producers of wine and fermented beverages such as ciders and small companies producing intermediate products such as półtorak and double mead, in particular, will benefit from this provision.

The act also provides for the introduction of a certification system for small producers and a more flexible sale of excise goods with excise duty paid in another country - the tax can be settled in the territory of the country, without the need to use an intermediary.

Introduction of the EMCS system

The new regulations also introduce an obligation to monitor intra-EU movements of excise goods with paid tax using the EMCS system (Excise Movement and Supervision System). Until now, paper documents have been used for this purpose.

Alcohol excise duty rates from January 1, 2022

With the beginning of the new year, the excise duty on alcohol increased and the current rates per one hectolitre of finished product are:

  • for beer - PLN 9.43,
  • for wine - PLN 191.00,
  • for ethyl alcohol - PLN 6,903.00 (100% vol.)

For comparison, the rates for 2021 also per hectolitre of finished product are as follows:

  • for beer - PLN 8.57,
  • for wine - PLN 174.00,
  • for ethyl alcohol - PLN 6,275.00 (100% vol.)

Increase in excise duty and the sale and production of beer

The increase in excise duty is primarily of concern to people associated with the brewing industry. In Poland, a significant drop in beer sales and production has been noticeable for three years, which has decreased by approximately 3.5 million hectoliters since 2018. In recent years, a large increase in the prices of ingredients used in the production of this drink can also be observed. The prices of packaging, raw materials such as barley malt, as well as electricity and heat are rising. Entrepreneurs must also take into account the increase in labor costs. Due to these factors, the price of beer has recently increased by nearly 15%, and therefore the increase in excise duty is not good news for producers.

Experts from the alcohol industry also believe that increasing the excise duty on beer will be counterproductive in terms of developing good, healthy habits among citizens. Poles will be more and more willing to reach for spirits, as it will be more profitable for them. Confirmation of this position may be the situation that took place in the country in 2020, when the Ministry of Finance increased the excise duty by 10% for both beer and stronger alcohol. In the former case, revenues only increased by 5%, while budget revenues from the sale of spirits increased by 13%.

Tax exempt alcohol

Contaminated ethyl alcohol contained in products not intended for human consumption is completely exempt from excise duty. This and other types of alcohol are not taxable when they are part of medicinal products specified in the Pharmaceutical Law, essential oils or mixtures of fragrances used in the production of food products and non-alcoholic beverages. Alcohol in chocolate products is also not subject to excise duty if its content does not exceed 8.5 liters of 100% ethyl alcohol per 100 kg of product or 5 liters of such alcohol per 100 kg for other foodstuffs or prefabricated products.