Quite recently we have engaged in various discussions as to why many sellers suddenly refuse to accept whisky orders from countries other than their own. I have spent a good few weeks looking very closely into this and am now able to report my findings.
The applicable EU law, or EU dircetive which covers this is called 92/12.
This measn the 12th ruling in the year 1992.
This may seem quite old, but the problem is the amendments which were made late in 2006, mainly to Article 10 within that directive.
Firstly, let me point you to the directive:
(Maybe Matt can explain why this doesn't directly link?
Which means you should copy and paste it into your browser or google - sorry)(Don't know, maybe the ! in the URL...Matt)
If you page down the text to where it says "Article 10" you will find:
1. Products subject to excise duty purchased by persons who are not authorized warehousekeepers or registered or non-registered traders and dispatched or transported directly or indirectly by the vendor or on his behalf shall be liable to excise duty in the Member State of destination. For the purposes of this Article, 'Member State of destination' shall mean the Member State of arrival of the dispatch or transport.
2. To that end, the delivery of products subject to excise duty already released for consumption in a Member State and giving rise to the dispatch or transport of those products to a person as referred to in paragraph 1, established in another Member State, and which are dispatched or transported directly or indirectly by the vendor or on his behalf shall cause excise duty to be chargeable on those products in the Member State of destination.
3. The duty of the Member State of destination shall be chargeable to the vendor at the time of delivery
What does this really mean?
Well, I have another official EU link which explains this in basic English:
(Matt, any help here would be appreciated)
This is the "faq" section of the EU website on taxation.
Point 16 says:
"Excise products sold via the Internet and supplied from one Member State to a customer in another Member State are subject to excise duties in the Member State where the purchaser receives his goods. So, before the excise product can be legally delivered to the purchaser, the excise duties and taxes will have to be paid. Note that in the case of distance selling, the obligation to pay excise duties in the Member State of the purchaser rests upon the vendor.
In order to clarify these points, I managed to establish direct contact with many of the authorities involved. The clearest explanation came from the EU department in Brussels where I spoke to the EU Taxation Department directly. (If anyone wishes to have this contact, it can be supplied privately, but I iwll not post this information on an open forum).
They were very clear:
If a seller of excisable goods (whisky) accpets an order under the distance selling directive, this means by telephone, fax or internet, from a customer in a different EU state, the SELLER must pay the duty in the country of the buyer.
In addition, when I asked the direct question about duty stamps, I was assured that the correct duty stamps for the country of the buyer must be supplied on the goods! Oh, also any duty stamps already on the bottle from the country of the seller, must be removed!
So, if I may now summarise the findings in a very simplistic way:
If someone from the UK wishes to place an order with a seller in another EU country (Germany, Italy, France, Republic of Ireland ... etc)
Or even if someone in mainland EU wishes to place an order with a UK-based seller, by telephone, fax or internet, the seller must do the following:
1. Establish contact with the tax authorities in the country of the buyer.
2. Establish a means of paying the correct duty to those authorities.
3. Actually understand how much duty is to be paid!
4. After paying, he may then ship the bottle.
5. The bottle must have the correct Duty Stamp placed on the bottle for that specific country.
6. If his own country uses another type of duty stamp, that one must be removed, although I was told that it could be obliterated if part of a fixed label.
7. Establish a means of reimbursement of duty already paid in his own country, as duty MUST only be paud ONCE!
As mentioned, if the seller is in the UK, they must conform with these instructions for the coutries of their buyers.
Basically, this is unworkable. How does a UK seller personally establish contact with every tax authority throughout the EU?
How does he pay those authorities in their own currencies?
Does this lead to a scale of customer prices depending upon which country they are in as all duties are at different levels?
When you as a buyer look at a website, will you have to go through a list of around 30 different possible prices before you see how much you have to pay for a bottle for your country?
Finally, I would like to add that this does appear to be a very new amendment and even many of the UK's HM C&E officials which I spoke to, still don't believe this. Especially the ones based here in Germany!
However, this IS the law and has the very real possibility to destroy international - EU sales of whisky!