What are the expected changes of the amendment to the Excise Duties Act?

• A number of changes are related to the extension of digitalisation in the field of excise duties, e.g. the introduction of submission forms for, inter alia, records in an undertaking for the manufacture of selected products or the submission of applications for the issue of permits for excise duty purposes.
• The changes to the excise duty on beer will be significant. In the assessment of small independent breweries, the amendment introduces a conceptual change by allowing for the “aggregation” of the small breweries production that are legally or economically linked.
• Procedural changes are also an important part of the amendment. Especially the changes in tax refunds to the taxpayer (in case of exports or reintroduction into the excise duty suspension regime) and the submission of an additional tax return for a lower tax or an increase in the refund claim are advantageous. In response to the judgments of the administrative courts and the outdated six-month time limits in the field of excise duties, which no longer adequately address the potential for tax evasion, it is proposed to align the time limit for filing the tax return of certain taxpayers with the three-year time limit specified in the Tax Code.
• However, for the refund of excise duties on mineral oils to individuals using such oils for heat production or other petrol for purposes other than sale, engine propulsion, heat production, or the production of mineral oil blends, the existing time limits should be reduced. The refund will now be claimed in the tax return by the end of the third calendar month following the end of the tax year in which the refund is due. As regards the tax refunds for other petrol, the tax period should be extended from monthly to quarterly, aligning it with the current process for the refund of excise duty on green diesel. For some entities that have been applying for refunds on a monthly basis (without utilising the option to claim a refund up to six months from the initial eligibility date), the period for which the refundable overpayment will be issued may be extended.
• Furthermore, in the field of excise duty collateral, it is proposed to eliminate the option of securing tax with a financial guarantee, allowing only a bank guarantee. The proposal also includes extending the guarantee period if the authorisation to operate a tax warehouse is cancelled (due to unmet guarantee conditions). The calculation of the collateral, which has been permitted to be reduced, is clarified with a coefficient that accounts for comparing the average value of the collateral for one tax period with the sum of the tax liability and the tax amount for three consecutive tax periods, considering potential quarterly fluctuations. Additionally, in excise duty enforcement related to excise duty collateral, the tax administration will be allowed to issue a notice to the guarantor without first attempting to enforce the tax arrears from the primary taxpayer (debtor).
• Other changes include revisions to the rules on the storage and sale of raw tobacco, the removal of restrictions on the time of sale for cigarettes and heated tobacco products once the excise duty rate changes. In addition, adjustments to the procedure for the determination of the retail price of cigarettes, as well as changes in several other sub-areas.
• In waste oil handling, measures are proposed to reduce the administrative burden and increase incentives for environmentally sound practices. For instance, users of waste oils exempted under Section 49(1) of the Excise Duties Act will no longer need to claim in written form or by any other method the release of the exempted waste oils from the taxpayer or other users. This aligns with the current practice for final consumers receiving selected exempted products at petrol stations or in unit packs. Additionally, it will no longer be necessary to demonstrate economic stability, reliability, or a debt-free status when seeking authorisation to receive and use exempt waste oils. Furthermore, it is proposed to explicitly provide an exemption for waste oil transports within the notification requirements for exempted mineral oil transports.
• Furthermore, the Excise Duties Act proposes a complete revision of the rules for the refund of tax to persons entitled to privileges and immunities and a revision of the refund of tax to the armed forces of foreign states – NATO allies and the Partnership for Peace countries.

The amendment has already gone through the revision proceeding. We will keep you informed of further developments.