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Possibility to take advantage of the exemption from excise duty on beer

Possibility to take advantage of the exemption from excise duty on beer produced in the amount of up to 200,000 hl in a calendar year, in the case of commissioning another beer bottling service entity and no obligation to include the amount of beer, which is an intermediate in the production of non-alcoholic beer, to the limit of 200,000 hl of beer produced in a calendar year, entitling to apply the excise duty exemption.

In accordance with the individual ruling issued by the Director of the National Tax Information on 19th of May 2020, reference number: 0111-KDIB3-3.4013.73.2020.1. of the Regulation of the Minister of Finance of 28th of December 2018 on exemptions from excise duty, it is crucial that the taxpayer producing beer doesn’t exceed the limit of 200,000 hl of beer produced in a calendar year. And the concept of “beer production” should be understood as defined in Art. 94 sec. 2 of the Excise Duty Act (hereinafter: “AE”) and cover the production or processing of beer, as well as its bottling. In addition, a taxpayer producing beer should be independent from other beer producing entrepreneurs, meeting the conditions for such independence specified in § 13 para. 3 of the regulation. Referring the above to the presented description of the future event, it should be noted, according to the applicant, that the company produces no more than 200,000 hl of beer per year. In this production limit, the applicant also takes into account the volume of beer that will be transferred to another entity for the service bottling into cans. At the same time, the beer will remain the property of the company. Therefore, it should be assumed that the Applicant will meet the condition specified in § 13 sec. 1 of the ordinance and didn’t exceed the annual beer production limit of 200,000 hl. The company stated in the description of the future event that it was independent of other entities producing beer (in the place where the company operates, no other entity operates), and at the same time it does not produce beer under the license of other entities . On the other hand, the relationship with a third party to which the company will commission the bottling of beer into cans will be purely service-related. The service provided will be only the bottling of the delivered beer, which is the applicant’s finished product – the beer will not be modified in any way during the bottling. Therefore, when the production volume of the company determined in this way does not exceed 200,000 hl, the company will benefit from excise duty exemption pursuant to § 13 para. 1 of the regulation. On the other hand, the amount of beer returned to the company from another entity that previously poured the beer into cans, will not constitute beer production for the applicant.

In turn, in the individual tax ruling issued on 2nd of January 2020 by the Director of the National Tax Information, ref. 0111-KDIB3-3.4013.254.2019.1. MAZ doesn’t require to include the amount of beer, which is an intermediate in the production of non-alcoholic beer, to the limit of 200,000 hl of beer produced in a calendar year, entitling to apply the excise tax exemption. It appears from the facts of the case that the applicant produces beer in a tax warehouse. The production of beer covers all production phases, and then it is bottled, cans and KEG packages. The applicant is considering starting the production of a drink known as “non-alcoholic beer”, ie a product which is not excise duty, with an actual alcoholic strength by volume of less than 0.5%. The production of non-alcoholic beer is similar to the production of alcohol-containing beer, with the difference that in a biotechnological process or with the use of devices designed to remove alcohol, the resulting product is de-alcoholed to a value equal to or less than 0.5% by volume. The end product will be non-alcoholic beer poured into individual packages. In this situation, it should be considered that the beer (classified under CN code 2203) being an intermediate produced by the applicant in the production of non-alcoholic beer – a drink that is not excise duty, with an actual alcoholic strength by volume not exceeding 0.5% – is not included in the limit by which referred to in § 13 point 1 of the Regulation of the Minister of Finance of December 28, 2018 on exemptions from excise duty. It should be noted that the above applies only to the situation described in the application, when the beer with CN code 2203 will be entirely produced at the applicant’s and then used for the production of non-alcoholic beer, i.e. a product that is not an excise product.

To sum up, it is possible to take advantage of the exemption from excise duty on beer produced in the amount of up to 200,000 hl in a calendar year, in the case of commissioning another beer bottling service entity and no obligation to include the amount of beer, which is an intermediate in the production of non-alcoholic beer, to the limit of 200,000 hl of beer produced in a calendar year , entitling to apply the excise duty exemption.