General Information
1. Introduction
The Republic of Cyprus, as a Member State of the European Union, imposes specific excise duties on alcoholic beverages, tobacco products, and energy products. Cyprus adheres to EU regulations regarding the holding, intra-Community movement, and monitoring of these products to ensure proper implementation and enforcement of these duties. In addition to EU-specified excisable products, Cyprus imposes excise duties on certain types of caviar, porcelain, and motor vehicles.
2. Legal Provisions
- Excise Duties Law No. 91 (I) of 2004: This law, including its amendments and replacements, governs excise duties in Cyprus.
- Regulatory Acts: Administrative acts issued under the Excise Duty Law can be found on the official website under “Laws / Customs National Legislation / Regulations, Orders, and Notifications.”
3. Definitions
- Registered Consignor: A person registered in the EU SEED database and licensed to dispatch excise goods under duty suspension.
- Entry into Free Circulation: Goods gain Community status after import duties and trade measures are applied.
- Registered Consignee: A person licensed to receive, but not hold or dispatch, excise goods under duty suspension from another Member State.
- Authorized Warehouse Keeper: A person licensed to produce, process, hold, receive, or dispatch harmonized goods under suspension in a tax warehouse.
- Tax Warehouse: Approved premises where harmonized products are produced, processed, held, received, or dispatched under suspension of excise duty.
4. Products Chargeable with Excise Duty and Their Rates
The EU mandates minimum excise duty rates on the following products, whether produced locally, sent from other EU Member States, or imported from third countries:
- Energy Products and Electricity: Gasoline, gasoil, kerosene, LPG, etc.
- Alcohol and Alcoholic Beverages: Beer, wine, spirits, etc.
- Tobacco Products: Cigarettes, cigars, fine-cut tobacco, and other smoking tobacco.
5. Movement of Harmonized Products
5.1. Harmonized Products from Member States
To secure harmonized rules for the movement and monitoring of excise duty products, Cyprus has implemented measures such as permits issued by the Director of Customs. These permits cover the entities and premises involved in the trade of harmonized products under duty suspension arrangements.
- Non-Regular Basis: Application form ED28 and a cash deposit are required for immediate payment of excise duty upon receipt.
- Frequent Basis: Application form ED27 and a continuous bank guarantee (C124) are needed for regular receipt of harmonized products.
- Suspension of Payment: Authorized Warehouse Keeper license (Form ED2) and tax warehouse approval (Form ED1) are required for producing, processing, holding, or dispatching harmonized products under suspension.
5.2. Imported from Third Countries
- Immediate Payment: Import duty, excise duty, and VAT must be paid immediately upon import.
- Suspension Arrangements: Products can be placed in a customs warehouse for storage under suspension arrangements.
6. When Does the Excise Duty Become Chargeable?
Excise duty becomes chargeable upon the release for consumption of products liable to excise duties. This includes:
- Exit from a suspension arrangement.
- Production outside a suspension arrangement.
- Importation not followed by entry into a suspension arrangement.
- Possession without previously paid excise duties.
7. Exemptions from Excise Duty
Exemptions are granted under specific conditions:
- Diplomatic or Consular Relations.
- Armed Forces of NATO Member States.
- Recognized International Organizations.
- Agreements with Third Countries.
- Supplies for Ships or Aircraft.
- Temporary Import or Entry from Other EU Member States.
8. Refund of Excise Duty
Refunds may be issued under conditions such as:
- Products delivered to exempt entities (diplomatic, consular, military, etc.).
- Energy products unsuitable for intended use due to contamination or mixing.
- Products dispatched to another Member State after consumption in Cyprus.
9. Communication
For detailed information, consult the official website of the Ministry of Commerce, Industry, and Tourism at mcit.gov.cy.
Conclusion
Understanding the intricacies of excise duties in Cyprus, including applicable products, rates, movement regulations, and exemptions, is crucial for compliance and efficient operations. For further details, refer to the respective legal provisions and administrative guidelines available on the official websites.
