European Commission refers Greece to the Court of Justice over reduced rate of excise duty applied to “Tsipouro” and “Tsikoudià”
The European Commission is referring Greece to the Court of Justice of the EU for failing to apply the standard rate of excise duty to two specific alcoholic beverages “Tsipouro” and “Tsikoudià”.
According to EU law, the same excise duty rate should apply to ethyl alcohol used in the production of alcoholic beverages, unless exemptions or derogations apply. However, Greece does not have a derogation for the spirits Tsipouroor Tsikoudià and currently applies a reduced rate of excise duty (50%) to Tsipouro and Tsikoudià as well as super-reduced rate (around 6%) to the production of that same spirits by small producers, so-called ‘two-day distillers’.
By applying these reduced rates, Greece is infringing EU rules since it favours spirits produced in its own country. This runs counter to the principle that prohibits internal taxation which affords indirect protection to domestic products or the imposition on the products of other Member States of any internal taxation in excess of that imposed on similar domestic products.
Furthermore, although small distilleries may benefit under certain conditions from a reduced rate of excise duty, this cannot be less than 50% of the standard national rate. By applying a super-reduced rate, the Greek scheme for two-day distillers does not respect these conditions.
In September 2015, the European Commission formally requested Greece to amend its excise duty legislation for the spirits “Tsipouro” and “Tsikoudià”. Since then Greece has not complied with the Commission’s opinion.
“Tsipouro” and “Tsikoudià” are traditional alcoholic products which are produced in the north of Greece and in Crete. Both drinks have protected geographical indications.