EXCISE DUTIES

    By courtesy of the Ministry of Public Finance

Excises are regulated by the provisions of the TITLE VII from the Fiscal Code (Law No. 571/2003), with the subsequent amendments and adjunctions.

    1. The products subject to excise duty

A. The harmonized excises are special consumption fees that are payable to the state budget for the following products derived from domestic production or from import:

a) beer;
b) wines;
c) fermented beverages other than beer and wines;
d) intermediate products;
e) ethyl alcohol;
f) tobacco products;
g) mineral oils and electricity.

The generating event

The products mentioned above are subject to excises at the moment of their production in Romania or at the moment of their import to the country.

The chargebility

The excise is chargeable at the moment of release for consumption or when losses or shortages of excisable products are discovered.

The level of excises for the above products is:

No	Type of products  or  group of products	U.M.	Excise duties (equivalent Euro/U.M.)
0	1	2	3	4
			G.O.no.33/2006 starting 2nd of May	G.O.no.33/2006 starting 1st of July
1	Beer of which :  1.1 Beer - brewed by independent  small breweries with the annual production capacity  which does not exceed  200.000  hl	hl/ 1 degree Plato1)	0.74  0.43	0.748  0.43
2	Wines 2.1. Still wines 2.2. Sparkling  wines	hl  of product	0.00 34.05	0.00 34.05
3	Fermented beverages other than beer and wines: 3.1.  still  fermented beverages 3.2.  sparkling  fermented beverages	hl of  product	0.00 34.05	0.00 34.05
4	Intermediate products	hl of product	51. 08	51. 08
5	Ethyl alcohol	hl of pure alcohol 2)	665. 35	750.00
	Tobacco products
6	Cigarettes	1.000 cigarettes	15.53+30%	16.28+29%
7	Cigars and cigarillos	1.000 pieces	32.13	34.50
8	Smoking tobacco, of which : 8.1 Tobacco intended for cigarette rolls	kg  kg	42.51 42.51	46.00 46.00
	Energy Products
9	Leaded petrol	1 ton 1000 litres	480.00 369.60	513.00 395.01
10	Unleaded petrol	1 ton 1000 litres	425.06 327.29	425.06 327.29
11	Gas oil	1 ton 1000 litres	307.59 259.91	307.59 259.91
12	Heavy fuel  oil	1000  kg	6.81	9.50
13	Liquid petroleum gas, of which: 13.1. used as propellant 13.2. used for heating puropses 13.3. for domestic consumption 3)	1000 kg	128.26 113.50 0.00	128.26 113.50 0.00
14	Natural gas, of which: 14.1. used as propellant 14.2. used for heating puropses	gigajoule	1. 59 0.00	2.00 0.00
15	Lamp oil  (including  kerosene)4) , of which : 15.1. used as motor fuel 15.2. used as heating fuel	1 ton 1000 litres 1 ton 1000 litres	469.89 375.91 469.89 375.91	469.89 375.91 469.89 375.91
16	Benzene, toluene, xylene and  other mixtures of aromatic hydrocarbons	1 ton	469.89	469.89
	ELECTRICITY (code CN 2716)
17	Electricity used in commercial purposes	MWh	0.14	0.19
18	Electricity used in noncommercial purposes	MWh	0.30	0.39

¹ Degree Plato is the weight of sugar expressed in grams contained in 100 grams of
solution measured at the origin at a temperature of 20° / 4° C.
² Hl of pure alcohol is 100 liters of refined ethyl alcohol with a concentration of
100% alcohol by volume at a temperature of 20° C contained in
a given quantity of an alcoholic product.
³ Liquid petroleum gas used for domestic consumption is liquid petroleum
gas distributed in cooking-type bottles. Cooking-type bottles are
the bottles with a capacity till maximum 12,5 kg.
⁴ Lamp oil used as fuel by the private individual, is not excisable..

    B. Other excisable products are the following:

1. green coffee within C.N. Codes 0901 11 00 and 0901 12 00;

2. roasted coffee, including coffee with substitutes, within C.N. Codes 0901 2100, 0901 22 00 and 0901 90 90;

3. soluble coffee, including blends with soluble coffee, within C.N. Codes 2101 11 and 2101 12;

4. natural fur products within C.N. Codes 4303 10 10, 4303 10 90 and 6506 92 00, with the exception of rabbit, goat and sheep;

5. articles from crystal within C.N. Codes 7009 91 00, 7009 92 00, 7013 21, 7013 31, 7013 91, 7018 90, 7020 00 80, 9405 10 50, 9405 20 50, 9405 50 00 and 9405 91;

6. jewelery from gold and/or from platinum within C.N. Code 7113 19 00, with the exception of wedding bands;

7. cars, including used cars that are imported, within C.N. Codes 8703 21, 8703 22, 8703 23 19, 8703 23 90, 8703 24, 8703 31, 8703 32 19, 8703 32 90, 8703 33 19, and 8703 33 90;

8. perfumery products within C.N. Codes 3303 00 10 and 3303 00 90;

9. microwave ovens within C.N. Code 8516 50 00;

10. air conditioning units  within C.N. Code 8415 10 10 and 8415 10 90;

11. hunting guns and guns for personal use, other than guns used for military or for sport within C.N. Codes 9302 00, 9303, 9304 00 00;

12. yachts and boats with or without engine, for recreation, within C.N. Codes 8903 10, 8903 91, 8903 92 and 8903 99.

          In the case of green coffee, the level of excise duty is equal the equivqlent in ROL of 680 euro per ton.

          In the case of roasted coffee, including coffees with substitutes, the excise is to equal the equivalent in ROL of 1000 euro per ton.

          In the case of soluble coffee, including blends of soluble coffee, the excise is to equal the equivalent in ROL of 4 euro per kilogram.

          The level of excises for the above products:

 

No	Type of products or group of products	Excise (%)
1	Natural fur products, with the exception of rabbit, goat and sheep fur products	45
2	Articles from crystal	55
3	Jeweleries from gold and/or from platinum, with the exception of wedding bands;	25
4	Perfumes; of which -eau de perfume	35 25
5	Eau de toilette, of which - eau de cologne	15  10
5	Microwave ovens	20
6	Air conditioning units	20
7	Hunting guns and guns for personal use, other than guns used for military or for sport	100
8	Yachts and boats with or without engine, for recreation 8.1. Yachts 8.2.. Boats with or without engine for recreation	50 30

    2.    Exemptions from payment of excises

          Exemptions from payment of excises are according with the provisions of European Union’s legislation:

2.1. General exemptions

 

Excisable products are exempt from the payment of excises when intended for:

1. delivery in the context of consular or diplomatic relations;

2. international organizations recognized as such by the public authorities of Romania, within the limits and under the conditions established by international conventions that establish the basis of these organizations or by agreements concluded at the level of the state or the government;

3. the armed forces belonging to any state that is a member of the North Atlantic Treaty Organization, with the exception of the armed forces of Romania;

4. state reserves and mobilization reserves during the period that the regime applies.

The excises are not to apply to the import of excisable products in the luggage of travelers and other private individuals, whether domiciled in Romania or abroad, within the limits and in accordance with the requirements provided by the customs legislation in force.

 

2.2. Exemptions for ethyl alcohol and other alcohol products

 

Ethyl alcohol and other alcoholic products are exempt from the payment of excises if they are:

 

1. completely denatured, in accordance with  the legal prescriptions;

2. denaturated and utilized for producing of other products which are not intended for human consumption;

3. used for the production of vinegar falling within NC code 2209;

4. used for the production of medicines;

5. used for the production of flavors for the preparation of  foodstuffs and non-alcoholic beverages with an alcohol strength  not excending 1.2% volume;

6. used for medical purposes in hospitals and pharmacies;

7. used directly or as a constituent of semi-finished products for the production of foodstuffs filled or otherwise, provided that in each case the alcohol content does not exceed 8.5 liters of pure alcohol per 100 kilograms of product that enters into compositions of chocolate and 5 liters of pure alcohol per 100 kilograms of product that enters into the composition of other products;

2.3. Exemptions for mineral oils

         

Exempt from the payment of excises are:

1. mineral oils used for any purpose other than as fuel or motor fuel;

2. mineral oils delivered for use as motor fuel for any aircraft other than private recreational aircraft. Private recreational aircraft means the use of an aircraft, by its owner or by the legal or physical person that uses it either though rental or through other means, for other than commercial purposes and in particular for other than the transport of passengers or goods or for the supply of services for consideration or for needs of the public authorities;

3. mineral oils delivered for use as motor fuel for navigation in international waters and for navigation in interior waters, other than navigation by private recreational vessel. Navigation by private recreational vessel means the use of any vessel, by its owner or by the legal or physical person that uses it either though rental or through other means, for other than commercial purposes and in particular for other than the transport of passengers or goods or for the supply of services for consideration or for needs of the public authorities;

4. mineral oils used in connection with the production of electricity and for combined heat and power generation;

5. mineral oils used for the purpose of testing aircraft and ships;

6. mineral oils injected into a blast furnace or other industrial equipment for the purpose of chemical reduction, as an additive to coke used as the principal fuel;

7. mineral oils that enter Romania in the standard tank of a motor vehicle and that are intended for use by such vehicle as motor fuel;

8. any mineral oil that is removed from the state reserve or the mobilization reserve, being granted free of charge for purposes of humanitarian aid;

9. any mineral oil directly acquired from economic agents producers or importers, and used for heating purposes in hospitals, sanatoriums, homes for the elderly and orphanages and others establishments for social assistance, religios establishments and educational institutions;

10. mineral oils used as unconventional fuel (bio-diesel).

         

2.4. Exemptions from payment for other products (other than the harmonized)

 

Are exempted  from the payment of excises:

1. products exported directly by economic agents producers or by economic agents that carry out activities based on a commission. The beneficiaries of the exemption regime are only products that are exported, directly or by economic agents commissioners, by producers that own the production equipment and facilities necessary for the realization of such products;

2. products placed under a customs suspension regime, according to the legal provisions in the field. For products placed under these regimes, the exemption is to be granted under the condition that the economic agent importer deposits a guarantee equal to the value of the related excises.

3. any imported product, obtained from donations or directly financed by non- reimbursable loans, as well as scientific and technical cooperative programs, granted to educational, health and cultural institutions, ministries, other public administration bodies, owners' associations and unions at the national level, associations and foundations of public utility, by foreign governments, international organizations and non-profit and charity organizations;

4. products delivered to the state reserve and the mobilization reserve, during the period that the regime applies.

    3. Payment of excises to the State Budget

Excises are to be paid to the state budget on or before the 25th of the month that follows the month in which the excise becomes chargeable.

By way of derogation, in the case of the import of an excisable product that is not placed under a suspension regime, the moment of payment of the excise is the moment of the registration of the customs import declaration.

 

    4. Minimal excise duty for cigarettes

 

Starting to the entry into force of Emergency Ordinance no.33/2006 (2^nd of May 2006), for cigarettes the excise duty which represent the amount between  the specific and ad-valorem excise, will not be less than 30,83 euro/1000 items, which means the minimal excise duty.

When the amount between the specific and ad-valorem excise duty is less than the minimal excise duty, will be paid the minimal excise duty.

    NEW 

 

Starting to the Romanian accesion time (1^st of January 2007), a New Fiscal Code will enter into force (for detailed information see Law 343/2006). In the excises field, the current modifications of the Fiscal Code are imposed by the nearby adhesion of Romania to the European Union, by the necessity of the harmonization of the fiscal legislation stipulated by the European directives, by the necessity of implementing the legal frame afferent to the

inter-community exchange of products submitted to excises, as the respecting of the assumed engagements through the Position Document afferent to 10^th Chapter – The taxation.

 

The main modifications brought to the 7^th Title – Excises from Fiscal Code are referring to:

 

In the harmonized excises domain

 

• Increasing the excises level of the main product groups submitted to this regime, entering in operation at 1^st of January 2007, according to the calendars of gradual increasing of excises to the minimal imposed levels, as following:

• leaded gasoline from 395,01 euro/1000 liters to 421,19 euro/1000 liters;

• gross petrol from 9,50 euro/1000 kg to 13,00 euro/1000 kg;

• natural gas used as fuel from 2,00 euro/gigajoule to 2,60 euro/gigajoule;

• electricity used in commercial purpose from 0,19 euro/Mwh to 0,26 euro/Mwh;

• electricity used in non-commercial from 0,39 euro/Mwh to 0,52 euro/Mwh;

• introduction of new products in application of the excises, as following:

• natural gas used as fuel for heating in commercial and non-commercial purpose with an excise of 0,17 euro/gigajoule. We mention that starting with 1^st of  January 2007, due to indispensability of introducing the excise for the natural  gas used in this purpose, it has been eliminated the “tax” owed to the budget for the natural gas derived from internal production – in value of 7,4 euro/1000 m³;

• institution of a reduced excise of 475 euro/hl of pure alcohol instead of 750 euro/hl of pure alcohol which is the standard excise for the ethylic alcohol produced in small distilleries; small distillery means the distillery of which annual production is below 10 hl pure alcohol;

• introduction in the national legislation of the community settlements regarding the exchange of excisable products between the member countries. Following the disestablishment of custom barriers between the member countries and elimination of notions of importer and exporter, it has been defined registered operators, no registered operators, the fiscal representative, long distance sale, the regime of products with paid excises;

• revision of application of exemptions from paying the excises in the field of energy products and electric energy and the achievement of a better concordance with the community foresights, by:

• exemption for the excises payment of the biofuel. In case of mixing biofuels with traditional fuels, the exemption will be granted according to the quantity of biofuel contained in the mixture and will not overpass a certain limit, established in according to with the community directive foresights;

• exemption for the excises payment of the fuels for engines used for  navigable channel dredging and in harbours;

• exemption for the excises payment of the fuels for engines used in the field of production, development, testing and maintainability of aircrafts and ships;

• exemption for the excises payment of energy products – natural gas, coal, solid fuel – used by the individuals and/or charity organizations;

• including of new foresights regarding unexcise the energy products and electric energy destined for certain utilizations, such as: dual utilization of energy products; electric energy when represents more than 50% of the cost of a product; electric energy used mainly in chemical reduction and metallurgical and electrolytic processes;

• institution of some measures for assurance of observance of the conditions imposed by the fiscal depository regime of the excisable products harmonized by annual notice of the authorized depository.

In the no harmonized excises domain

• including in application of the excises of the engines for boats, in order to eliminate the possibilities for fiscal fraud and assurance of the paramount principle of  taxation;

• assurance of the same excising regime for hunting guns both for companies and for individuals;

• decreasing with 10% of the excises for all coffee range;

• re-establishing the taxation system for cars and jeeps.

Regarding the calculation of the excises expressed in euro equivalent, it has been established the principle of using the exchange rate for a one year period, the currency being communicated by the Romanian National Bank for the first working day of the October from the last year.

• Order No. 1.459 of the Minister of Public Finance/2006

Order No. 1.459 regulates the set-up of the National Ledger of the operators of harmonized excisable goods and approves the procedure of setting-up and updating the Ledger.

The National Ledger of the operators of harmonized excisable goods contains information referring to the entities authorized as registered warehousers and operators, as well as to the places authorized as tax warehouses, needed both for implementing the system of administrative cooperation and information exchange in the area of excise duties with the European Union member states and for strengthening the administrative capacity of the fiscal authority that administrates the natural and legal entities certified by the competent fiscal authority, upon deployment of their activity, to manufacture, transform, hold, receive and deliver harmonized excisable products.

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