Alcohol Products Tax

Table of Contents

Products Covered

The Finance Act 2003 and the Alcohol Products Tax Regulations 2004 modernised excise legislation in relation to alcohol products. The legislation is set within the parameters of EU legislation, including Directive 92/83/EEC.

The principal categories of alcohol products are as follows:

Spirits cover whiskey, brandy, gin, vodka, rum and other spirituous vodkas with an alcohol base. This includes other alcoholic beverages exceeding 22 per cent volume.
Beer covers beer made from malt exceeding 0.5 percent volume. It includes any beverage exceeding this volume with a mixture of beer and non-alcoholic beverages.
Wine is unfortified grape wine and unfortified beverages with a grape wine base.

Other fermented beverages are divided into cider and perry and non-cider and perry. Cider and perry classification is defined to include cider with apple or pear juice added.

Perry with apple or pear juice added is also in the same category. The addition of other fruit juices or fruit flavours to cider or perry is classified as other than cider and perry and subject to different rates.

This category includes mead alcopops, wines with an alcoholic content at least partly of fermented origin, and wines other than grape, such as elderberry wine, strawberry wine, and slow wine. It also covers some fortified products with an upper strength limit of 10 percent volume when still and 13 percent when sparkling. If they do not fall within the above category, they fall into the intermediate category.

Intermediate beverages cover fortified fermented beverages above 10 percent when still and 13 percent when sparkling. This encompasses sherry, port and cream liqueurs. Other products including new products must be the subject of consultation with the Revenue office or Revenue import office.

Classification

Each of beer, wine, other fermented beverages and intermediate beverages are classified under the customs codes and such products are classified as excise products for excise purposes. Various alcoholic products within each excise classification, together with the applicable bases of charge of the tax, are set out in the legislation.

Each classification of alcohol has an excise reference number. This must be used on completion of certain returns by brewers and in records and receipts of both intra-EU imports and imports from outside the EU. Where importers or warehousekeepers have doubts regarding the applicable reference, they may consult with Revenue for clarification and advice.

There are prescribed methods for determining the alcohol strength of products that are set in the regulation. The product strength is declared in the tax returns to one decimal place. There are criteria for calculating the quantities.

Returns

A monthly return is required by tax warehouses in which cider or perry are produced. It must cover products delivered from the warehouse for domestic consumption during the month.

Returns must be lodged with the Revenue office monthly. Other alcoholic products are subject to a similar return obligation. Stock returns must also be made monthly in addition to the above returns of home consumption (in the state).

Reliefs

There are reliefs for certain alcohol and denatured spirit products which are used for particular purposes. Where alcohol products have been rendered unfit for human consumption, relief is also available.

There is relief from tax in relation to alcohol products produced solely for private consumption on private premises or consumption by the producer, his family or guests. It must not be produced or supplied for consideration. The exemption applies to wine, beer and other fermented beverages with alcohol content which is of fermented origin.

Fifty percent relief is available on the tax at the rate for beer exceeding 2.8 percent volume for beer produced in qualifying microbreweries within the European Union.

Reduced alcohol products tax applies for certain mid-strength beers and mid-strength cider and perry where the alcoholic strength does not exceed 2.85 percent by volume.

There are three strength bands for beers:

5 percent volume to 1.25 percent volume (zero rate).
2 percent volume to 2.8 percent volume.
exceeding 2.8 percent volume.

There are two bands for cider and perry:

still and sparkling up to 2.8 percent.
still and sparkling 2.8 percent to 6 percent.

Payment

Value added tax and excise alcohol products tax are paid together.

The Revenue Commissioners may permit deferred payment, subject to security as they require. The payment may be deferred to a date not later than the month following that in which the tax is payable.

The legislation sets out in schedules the quantum of tax per volume or unit of quantity of alcohol. Spirits are taxed per litre of alcohol in the spirit.

Beer may be quantified by a number of alternative method. Quantity may be expressed in terms of hectoliter percent per case or tray or similar packaging unit. The quantity may be expressed in terms of bulk litres per standard pallet or consignment.

Wine bottle contents are taken to the nearest 5 millilitres. The tax is expressed per hectolitre of alcohol strength within the relevant bands.

Other fermented beverages tax is calculated in a broadly similar way. The rates commonly vary in the annual budget.

Warehouse keepers

Owners or tenants of the relevant premises may apply for authorisation from the revenue as warehousekeepers. The person concerned must demonstrate to the Revenue that the business is carried on with a view to realisation of profits from legitimate trade in excisable products.

They must be registered for VAT, have a tax clearance certificate and hold a relevant excise license for the production and processing of alcohol. They must provide adequate security and be registered with ROS under a particular excise management system.

Revenue must be satisfied, they can achieve the satisfactory levels of control. There must be satisfactory systems of stock control, accounting, management and supervisory control. Premises must comply with health and safety legislation and other regulatory requirements.

The tax warehouse approval may issue in respect to different types of activities. Tax authorization may be given for general storage and distribution warehouses. It may be approved for the sole use of the applicant as proprietor warehouse keeper or maybe used by another authorised trader such as his tenant.

Warehouse Authorisations

An authorisation approval may be given for a facilitation activity. This may apply to traders who store for maturation or are engaged in a special trade, carrying out operations on manufactured goods such as promotional packaging or repackaging.

Traders may be authorized as warehousekeepers to manufacture excisable products. The approval may be limited to particular activities. Revenue may require additional control measures. A financial bond will be required from an approved guarantee society or institution to secure excise duty outstanding and held in the tax warehouse that is moved under duties suspension arrangements.

The authorisation is personal to the warehousekeeper. They may not be transferred. If the ownership is transferred, the new owner must seek approval.

Where the authorised warehousekeeper as a company and there is a change of control, the Revenue must be notified and must approve the underlying controllers.

Authorisations may be revoked for various reasons, including contraventions and failures to comply with conditions and excise law. Where they no longer meet the relevant criteria for registration, the licence may be revoked.

The Revenue must be advised of any changes which are relevant to the conditions of authorisation. Any structural alteration to the warehouse must be approved.

There are appeals available in respect of a refusal of authorization as a warehousekeeper or tax warehouse.

Manufacturing Licences

The Finance 1909-1910 Act deals with the grant of manufacturing licenses for intoxicating liquor. A manufacturing license authorizes the manufacture of and wholesaling of dealing in the relevant intoxicating liquor.

Manufacturing without a license in a criminal offence and all goods, vessels and materials used for distilling and brewing are subject to forfeiture. It is an offence to breach terms of the license. In each case there is a fine for each offense.

A distiller is subject to the provisions of the Spirits Act 1880 and must have a license, permit or certificate under that legislation. A manufacturer’s licence permits wholesale dealing at the premises of manufacture provided that the provision is direct and wholesale.

A distillers licence is an annual license permitting the manufacture of spirit. Excise duty is payable annually. Application is made to the Revenue. Where the applicant is a company, the underlying particulars are required for approval.

A broadly similar procedure exists in relation to annual renewal of rectifier and compounders of spirit’s licenses as exist in relation to distillers licences above.

A brewer’s license for production of beer for sale is an annual licence. It permits ale, porter beer, black beer and other beers sold under that description containing more than 2 percent proof of spirit. It is an annual license, applied for and granted under the same conditions as above.

Similar and Equivalent Licences

Equivalent licences are applicable in respect to the manufacture of cider or perry for sale. A manufacture of sweets as defined is covered by similar excise license granted under a similar procedure.

There a number of wholesaler licenses provided under the above Acts. Wholesale beer dealer’s license permit sale of quantities of at least 4-1/2 gallons or not less than two dozen quart bottles at minimum quantity.

The licence is an annual licence applied for by the Revenue Commissioner. A Tax clearance certificate is required.

Wholesaler’s Licence

A brewer’s wholesale dealer license requires a District Court certificate in relation to the character and suitability of the applicant and the premises. The application may be made to the District Court at any time. A court certificate is required for the transfer of the license. A certificate is not necessary for renewal.

The licence is granted by the Revenue on production, where a necessary of the relevant court certificate.

There are no time restrictions on trading hours under a wholesale dealer’s license. However, the premises is also registered for retail sales, these cover both retail and wholesale sales.-

A wholesaler wine dealer’s license permits the sale in quantities of at least two gallons or two dozen one dozen reputed quart bottles. The licence is annual and requires a tax clearance certificate. A court certificate is not required to grant or renew the license.

A wholesaler sweet dealer’s license permits the sale of sweets in quantities of at least two gallons or not less than one dozen reputed quart bottles, but not less.

A court certificate is not required for the grant or renewal of the licence. The license is annual. The licence is attached to the premises as usual for intoxicating liquor licenses.

Finance Acts 2013- 2016

Finance Act 2013 provides that alcoholic products held for sale on an unlicensed premises may be forfeited where the premise remains unlicensed because the person who should hold a license is not qualified for tax clearance certificate. This is designed to combat the continuation of trade where a person does not address tax arrears and does not hold a license accordingly.

The Finance Act 2014 increases the volume of beer eligible for 50% relief brewed in small breweries. The threshold is now 30,000 hectolitres per annum.

Finance Act 2016 increased the eligibility threshold to 40,000 hectolitres for small breweries to claim 50 per cent relief from alcohol product tax for beer brewed in small breweries.

Finance Act 2017 – 2019

Finance Act 2017 introduces the so-called sugar-sweetened drinks tax as of 1st April 2018 subject to a commencement order. It is charged in the first supply of sugar-sweetened drinks made in the state. It applies to drinks with a sugar content of 5 grams or more but less than 8 grams per 100 millilitres at a rate of 20 cent per litre. A second rate applies to drinks with a sugar content of 8 grams or more at 30 cent per litre.

The Finance act 2018 amended the definition of a “sugar sweetened drink” to ensure that certain categories of beverages will be subject to sugar sweetened drinks tax where those beverages do not meet a minimum calcium content of 119 milligrams per 100 millilitres. The amendment fulfils the commitment made as part of the formal EU State aid notification process for sugar sweetened drinks tax.

Finance Act 2019 amends section 78A of Chapter 1 of Part 2 of the Finance Act 2003 to provide for an increase to the production threshold for eligibility to claim 50 per cent relief from Alcohol Products Tax for beer brewed in small breweries. The production threshold is raised to 50,000 hectolitres per annum, relief is granted up to 30,000 hectolitres per annum.

Finance Act 2021

Finance Act 2021 amends Chapter 1 of Part 2 of the Finance Act 2003, to transpose the provisions of Council Directive 2020/1151 (amending Council Directive 92/83/EEC – “the Alcohol Structures Directive”, which lays down a harmonised approach to the structures of excise duties on alcohol and alcoholic beverages in the EU) into National law. This includes amendments to the provisions on denatured alcohol and the introduction of new provisions for certifying small producers of alcohol products.

Specifically, the amendments to the denatured alcohol provisions provide clarity to the conditions for the mutual recognition (amongst Member States) of partially denatured alcohol and provide that partially denatured alcohol used for the maintenance and cleaning of the manufacturing equipment is now covered by the exemptions under section 77 of the Act. The new provisions for certifying small producers now require declarations to be made with regard to the status of small producers and their annual production when consigning alcohol products to other Member States.

Finance Act 2021 amends section 78A of Chapter 1 of Part 2 of the Finance Act 2003, which provides reduced rates of excise duty on beer produced by small breweries, to extend the scope of the scheme to include qualifying beer imported from Third Countries.

Finance Act 2022

Finance Act 2022 provides for an increase to the production threshold for eligibility to claim relief from alcohol products tax on beer brewed in small breweries. The production threshold is raised to 75,000 hectolitres per annum, the limit on the amount of relief granted remains unchanged at up to 30,000 hectolitres per annum.

The self-certification requirements apply to small independent producers (within the State) of beer, wine, other fermented beverages, intermediate products, and ethyl alcohol who wish to avail themselves of reduced rates in other Member States.

There is an excise relief scheme allowing reduced rates of alcohol products tax on cider and perry produced by small independent producers. This section transposes Article 13a of Council Directive 92/83/ EEC (as amended by Council Directive (EU) 2020/1151) into National law.

Finance Act 2023

Finance Act (no.2) 2023 clarifies that certain references to European Union and Member State in Finance Act 2003 do not apply as if the reference included a reference to Northern Ireland with respect to provisions on the certification of small producers. This means those consigning such products to Northern Ireland from Ireland are not obliged to complete the certification set out. This arises from changes made under the Windsor Framework.

Finance Act updates references to the documentation used by consignors of duty paid alcoholic products produced by small producers, to reference the new electronic form of documentation.

Finance Act 2023 amends Schedule 2 of Chapter 1 of Part 2 of Finance Act 2003 to increase the rates of excise duty applicable to cider and perry exceeding 8.5 per cent abv to align with the rates applicable to Other Fermented Beverages other than cider and perry at similar strengths. This was proposed in order to ensure that the domestic legislation is compliant with the requirements in the EU Alcohol Directive.