Analysis

Changes in excise duty affecting denatured ethyl alcohol

Excise Duty Express 03/2017 | 15 February 2017

A bill amending the Excise Duty Act, proposed by the government, with changes to excise duty regulations applicable to completely denatured ethyl alcohol, has been brought before the Sejm lately. Additionally, a Regulation of the Minister of Development and Finance, dated 11 January 2017, amending the regulation on the bill of lading, the terms and conditions of returning excise goods exempted from excise duty considering their intended use and ethyl alcohol denaturants (hereinafter referred to as the "Regulation on denaturants") has entered into force. It has introduced changes with respect to some instances where the excise duty exemption applies to partially denatured alcohol.

What will change?

The bill proposed by the government (paper no 1288) introduces changes to the principles applicable to excise duty exemption for completely denatured alcohol.

On the other hand, under the Regulation on Denaturants Polish business entities may apply the excise duty exemption also to partially denatured alcohol which is used for purposes of manufacturing biocidal products and medical devices.

A bill amending the Excise Duty Act, proposed by the government

A bill amending the Excise Duty Act, proposed by the government, was brought before the Sejm on 7 February 2017. According to the parliamentary agenda, the first reading will take place from 22 to 24 February 2017.

The proposed amendments are mainly aimed to rule out the possibility of complete denaturing of alcohol in Poland with the use of additional denaturing procedures recognized by individual EU member states, as referred to in Commission Regulation (EC) No 3199/93 on the mutual recognition of procedures for the complete denaturing of alcohol for the purposes of exemption from excise duty. For instance, it is proposed that in Poland the excise duty exemption should apply to alcohol denatured completely using the Hungarian method, provided that it has been denatured in Hungary.

Details of the bill were provided in the Excise Duty Express of 18 October 2016

Regulation on ethyl alcohol denaturants

Under the Regulation on Denaturants the excise duty exemption may also be applied to partially denatured alcohol which is used for purposes of manufacturing biocidal products and medical devices.  The Regulation entered into force on 28 January 2017.

It should be emphasized that both completely and partially denatured alcohol have been identified as subject to the regulations concerning the monitoring of road transport of goods.

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