What is alcohol
Alcohol means beer, wine, fermented beverages, intermediate products and other alcohol. All products belonging to CN heading 2203–2208 with an ethanol content of over 1.2% (over 0.5% in the case of beer) are deemed alcohol within the meaning of the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act, regardless of their suitability for drinking.
Food with ethanol content exceeding 1.2%, including flavourings, food supplements, etc. are also deemed alcohol.
Alcohol production is the manufacturing, processing and bottling of alcohol. Alcohol may only be produced in excise warehouses. Small independent alcohol producers must also produce in excise warehouses. As an exception, a natural person may manufacture beer, wine and fermented beverages at home, for the consumption of themselves or their family and on the condition that it is not used for business purposes (is not sold or otherwise used in business).
Handling of alcohol is the manufacturing, processing and bottling (i.e. production), import, export, offering for sale or sale of alcohol by an undertaking to another undertaking or to another person in the form of wholesale, as well as offering for sale or sale to a consumer, i.e. in the form of retail sale and possession, storage or distribution for commercial purposes.
Wholesale or retail of alcohol may be performed by businesses that are registered in the commercial register and have notified the register of economic activities of their area of activity (submitted a notice of economic activity). The wholesale and sale by retail of alcohol by businesses is only permitted through the place of business specified in the information in the register of economic activities that is provided in the notice of economic activity.
Please note! The sale of alcohol from an e-commerce store is deemed retail and this may only be performed by businesses that have stores or catering establishments registered in the Register of Economic Activities.
Alcohol that is handled must generally be registered in the Register of Alcohol.
A person that releases alcohol for consumption becomes subject to payment of excise duty (brings it to Estonia without excise suspension arrangement or brings it from excise suspension arrangement to a conventional warehouse or store). Excise duty on alcohol produced in Estonia is paid by excise warehousekeepers, excise duty on alcohol transported to Estonia from another Member State is paid by excise warehousekeepers or registered consignees or recipients of the alcohol and excise duty on alcohol imported to Estonia is paid by the importer.
Excise suspension arrangement is the suspension of a tax liability upon the production, storage or transportation of excise goods. Within excise suspension arrangement, goods may only be dispatched by permitted persons: the excise warehousekeeper, registered consignee, including registered occasional consignee.
The following excise duty rates apply.
Excise duty rate from 01.02.2018 (in euros)
Excise duty rate from 01.07.2019 (in euros)
|Beer*||16,92||12,70||Ethanol content per one per cent of ethanol by volume per hectolitre|
|Fermented beverage or wine with ethanol content of ≤ 6 vol||84,41||63,35||hectolitre|
|Fermented beverage or wine with ethanol content of > 6 vol||147,82||hectolitre|
|Other alcohol||25,08||18,81||Ethanol content per one per cent of ethanol by volume per hectolitre|
* A small independent beer producer that produced up to 15,000 hectolitres during the previous calendar year needs to pay excise duty at 50% of the normal rate on up to 15,000 hectolitres produced since the beginning of the current year.
Excise warehousekeeper means a person authorised to produce, process, store, receive excise goods in an excise warehouse and to dispatch excise goods from the excise warehouse under an excise suspension arrangement.
A liability to pay excise duty arises upon the dispatch of alcohol from the excise warehouse outside of the excise suspension arrangement which means that excise duty applies only once the alcohol has been removed from the excise warehouse for the purposes of consumption.
You can read more about the requirements and obligations applicable to excise warehousekeepers and registered consignees on the page Excise permits (in Estonian).
The Alcohol, Tobacco, Fuel and Electricity Excise Duty Act stipulates certain exceptions applicable to small independent producers that only produce beer, fermented beverages and wine out of all excise goods.
Please note! Producers of intermediate products or other alcohol are not deemed small independent producers under the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act.
- Special tax provision for independent small beer producers (§ 46 (11 ) of Alcohol, Tobacco, Fuel and Electricity Excise Duty Act)
The excise duty rate applicable to independent small beer producers is 50% of the normal rate if the following conditions are met:
- the producer produced up to 15,000 hectolitres of beer during the previous year;
- the producer is legally and economically independent of other beer producers (the definition has been explained in § 46 (9) of the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act);
- the producer uses facilities physically separated from other beer producers and does not operate under a licence.
In order to qualify for the beneficial rate the small independent beer producer or the person that releases its production into consumption must submit to the Estonian Tax and Customs Board information on production volume and of meeting the conditions before such beneficial rate can be applied.
- Additional simplifications for small independent producers of only beer, wine and fermented beverages that are legally and economically independent of other alcohol producers
2.1. A small independent producer that produces annually up to 40,000 litres of beer and up to a total of 15,000 litres of wine and fermented beverages combined (Alcohol, Tobacco, Fuel and Electricity Excise Duty Act, § 31 (15)):
- does not have to be a competent measurer to perform measurements. However, it must measure raw materials, semi-finished products and excise goods using measuring instruments that are verified (or calibrated in exceptional cases) and document the measurement results.
- does generally not need to provide security. The tax authority may request the security if it has reasons to believe that the person may fail to discharge the tax liability.
2.2. A small independent producer that operates outside a city, town or small town as an undertaking providing accommodation and catering services within the meaning of the Tourism Act and whose activities meet the following conditions:
- annual production output of up to 4,000 litres;
- production takes place in the excise warehouse located in the premises which are used for providing accommodation and catering services;
- the beer, wine and fermented beverages produced are sold only for consumption on the premises of the place of business (but not in the excise warehouse!) of the undertaking providing accommodation and catering services and
- it does not receive alcohol in the excise warehouse. (Alcohol, Tobacco, Fuel and Electricity Excise Duty Act, § 35)
The simplifications listed in section 2.1 apply to such small independent producers, as well as the following:
- It does not have to be registered in the commercial register or registered for value-added tax;
- It is subject to simplified requirements relating to the place of business. Please note: premises used for excise warehouse purposes must be separated from the premises of other companies and from residential premises;
- A small independent producer does not have to issue a delivery note upon the dispatch of alcohol from the excise warehouse to the premises which are used for providing accommodation and catering services;
Retail sale of excise goods in the excise warehouse is prohibited, so the excise warehouse and place of sale must be separated.
An activity licence of a registered consignee grants the right to receive excise goods dispatched under an excise suspension arrangement from another Member State for business purposes but does not give the right to store or dispatch excise goods under an excise suspension arrangement.
An activity licence of a registered consignee may also be applied for the occasional receipt of a specific consignment of goods. This may be applied for by a person that is not engaged in the wholesale or storage services of excise goods and receives excise goods on an irregular basis for the purposes of retail sale.
More information on applying for licenses (in Estonian).
An activity licence for a registered consignee may also be applied for by a person that receives on an occasional basis excise goods dispatched under an excise suspension arrangement from another Member State (hereinafter occasional receipt).
Occasional receipt presupposes irregular activity. For example, such a person may be an operator of a restaurant or store that wishes to augment the assortment of its restaurant or store with an alcoholic beverage that is unavailable in Estonia and for such purposes occasionally purchases alcohol directly from the excise warehousekeepers of another Member State.
An activity licence for occasional receipt is granted separately for the receipt of each consignment and it may be applied for by a person that meets the following conditions:
- receives excise goods dispatched under an excise suspension arrangement from another Member State on an occasional basis;
- does not store received excise goods for the purpose of providing a service or sale by way of wholesale and has not engaged in the provision of the services of wholesale or storage of excise goods of the same type as the received goods during the twelve months preceding the month of submission of the application;
- has submitted the documents and information required pursuant to the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act (Alcohol, Tobacco, Fuel and Electricity Excise Duty Act, § 40 (11)).
Occasional receipt is subject to simplified procedures for the application and issuance of activity licenses. In order to apply for a licence, a person must submit a written application that must contain the following:
- Place and time of receipt of excise goods
- Description, quantity and purpose of use of the excise goods received
- Its areas of activity, contact details and bank details
- Information concerning the consignor of the goods
Licenses are issued within 7 days from the date of submission of required documentation and security.
A security deposit applicable to occasional recipients of goods is calculated based on the amount of tax liabilities that may arise from the quantity of excise goods to be received under an excise suspension arrangement.
Alcohol dispatched under an excise suspension arrangement from another Member State is transported to Estonia to the place of business of an occasional consignee. When transporting alcohol, such alcohol must be accompanied by a mandatory electronic delivery note of excise goods eSL provided for in the Commission Regulation (EC) No 684/2009.
Occasional recipients of goods are subject to excise duty upon the receipt of alcohol and are required to submit an excise duty return and to pay excise duty not later than by the fifth day following the date that such excise duty liability arose.
Occasional recipients of goods are entitled to revenue stamp received alcohol by themselves on the condition that the revenue stamps are in their possession at the latest by the date of receipt of the alcohol and revenue stamps are affixed on the alcohol promptly.
A tax representative is a person that provides representation to non-resident excise duty payers in Estonia.
Tax representatives of distance sellers pay excise duty on alcohol received in Estonia by distance selling. Information on tax representatives is published on the webpage “Non-resident tax representatives".
How to become a tax representative?
A tax representative must have an activity licence and an application must be submitted to receive it. Such application must contain the following information:
- name and address;
- registration code;
- field of activity and place of business;
- type of excise goods (alcohol, tobacco, fuel) (specified if the person wishes to serve as representative of distance sellers of excise goods).
An activity licence is granted to persons that are entered in the commercial register and in the Estonian register of taxpayers.
A person may act as tax representative to distance sellers if such person is registered in the commercial register and in the Estonian register of taxable persons and if they have been granted an activity licence of a tax representative to distance sellers of excise goods.
A tax representative shall provide comprehensive security for guaranteeing the payment of excise duty on excise goods transported to Estonia by distance sellers.
When does a tax liability arise?
A tax representative incurs a tax liability on the date of receipt by the recipient of alcohol.
The taxable period applicable to the tax representative is the calendar month and it shall file an excise duty return and pay the excise duty on the 20th day of the calendar month following the taxable period.
The tax representative is under the following obligations:
- maintain documented accounting across each distance seller that they represent in the payment of excise duties and record the information submitted by the distance seller;
- maintain an accumulating account on the creation of the obligation to pay excise duty;
- after the discovery of loss of excise goods, it required to promptly notify the Estonian Tax and Customs Board of such occurrence and prepare a report in which the extent of the loss and reasons for the occurrence thereof are indicated and to submit the report together with relevant proof to the Estonian Tax and Customs Board.
A permit for exemption from excise duty on alcohol grants a right to the holder of such permit to import, purchase from excise warehousekeepers or receive under exemption from excise duty alcohol that has been released for consumption in another Member State and dispatched to Estonia for business purposes (for example on the purchase of fragrances and flavourings from another Member State) in the quantity specified in such permit.
A permit for exemption from excise duty on alcohol may only be applied for by persons active in certain industries.
Alcohol exempt from excise duty may only be used for purposes specified in the permit for exemption from excise duty on alcohol.
Alcohol exempt from excise duty may only be used for purposes specified in the permit for exemption from excise duty on alcohol. You can read the guidelines below to find out more information about the conditions and application process of a permit for exemption from excise duty on alcohol.
When engaging in the trade of alcohol, the recipient of alcohol may be an excise warehousekeeper, registered consignee, regular business and in certain circumstances also a natural person.
A regular business has the option to use the services of an excise warehousekeeper or registered consignee (this person is unrelated to import) for the receipt of alcohol under an excise suspension arrangement. By itself, a regular business may only receive alcohol if excise duty has already been levied in the consignor’s Member State or during importation.
A natural person may only receive alcohol if excise duty has already been levied in the consignor’s Member State and such sale of alcohol is deemed distance selling. More detailed explanations are provided below on the transport between Member States of alcohol released for consumption and rules on the import and distance selling of alcohol.
Transport of alcohol released for consumption between Member States for commercial purposes
When excise goods are released for consumption in one Member State, having become subject to excise duties, are transported to another Member State for use for commercial purposes such excise goods are subject to excise duties once again in the country of destination.
The storage of excise goods in another Member State is also deemed use for commercial purposes.
The consignor of goods may apply for a refund of excise duty previously paid in the Member State of origin if it has dispatched such goods in accordance with requirements and submitted all required documentation as proof regarding the transport of goods to another Member State and the application of excise duties in such Member State.
The import of alcohol is the release of alcohol for free circulation as defined by the Community Customs Code.
Import is generally the transport of excise goods to Estonia from any country outside the European Union, taking into account the provisions applicable to certain territories pursuant to Articles 5 and 6 of Directive 2008/118/EC.
Importers of alcohol become liable to pay excise duty on the import of excise goods on the date generally when the customs debt is incurred and pay excise duty on import pursuant to the customs rules. An importer of excise goods is a person by whom or on whose behalf excise goods are declared for the customs procedure of release for free circulation within the meaning of the Community Customs Code.
Export is the application of the export customs procedure to excise goods within the meaning of the Community Customs Code.
Export is generally the transport of excise goods from Estonia to any country outside the European Union, taking into account the provisions applicable to certain territories pursuant to Articles 5 and 6 of Directive 2008/118/EC.
As the excise duty which has been levied on exported excise goods is not subject to refund it is well-advised to export excise goods on which excise duty has not been levied, i.e. excise goods stored in an excise warehouse under an excise suspension arrangement.
Distance selling is the transportation by an undertaking of excise goods released for consumption in one Member State (where excise duty has been paid) to a person of another Member State who does not use such excise goods for commercial purposes. The most common form of distance selling is internet commerce.
Alcohol transported in such a manner becomes subject to excise duty again in the country of destination and payment of excise duty occurs in accordance with the procedure that such Member State has established.
The distance seller of goods may apply for a refund of excise duty previously paid in the Member State of origin if it has dispatched such alcohol in accordance with requirements and submitted all required documentation as proof regarding the transport of goods to another Member State and the application of excise duties in such Member State.
Therefore, it is essential that businesses fully inform themselves about the requirements applicable to distance selling both in the Member State of origin and Member State of destination prior to engaging in distance selling.
An alcohol revenue stamp is a circular hologram with a diameter of 20 mm meeting special security requirements that contains a unique letter and number combination of the revenue stamp.
Alcohol imported to Estonia, transported from another Member State to Estonia or otherwise released for consumption in Estonia must be revenue stamped, unless such alcohol is subject to exemption from excise duty or excise suspension arrangement.
On 1 February 2022 the amendment of Regulation No 25 of the Minister of Finance of 12 April 2006 which introduced a new design for the revenue stamp of strong alcohol entered into force. Revenue stamps with the old design will remain valid in parallel with the new ones and will be issued by the Estonian Tax and Customs Board until the stock is exhausted. The new design does not impose restrictions on the products bearing revenue stamps with the old design already in consumption. In addition to its appearance, the new design of revenue stamps differs from the design used so far in terms of the number, which is now 9 symbols long (3 letters and 6 digits). The old design of revenue stamps has a number with 8 symbols (2 letters and 6 digits).
Alcohol is not revenue stamped when alcohol is:
- transported from a non-Community country to a natural person for non-commercial use or purchased by means of distance selling from a Member State for non-commercial use;
- transported on board such ship or aircraft that navigates outside of Estonia for commercial purposes;
- sold in a point of sale located in the customs inspection zone of an airport;
- provided to the register of alcohol for the making of a register entry or
- a medicinal product within the meaning of the Medicinal Products Act.
Alcohol is revenue stamped only if it is subject to excise duty in Estonia and a revenue stamp is deemed to be the object of an offence if it is affixed to a product which is not subject to revenue stamping.
Therefore, it is prohibited to export, transport to another Member State or sell on the basis of exemption from excise duty products revenue stamped from an excise warehouse, for example to diplomats on the basis of a permit for exemption from excise duty.
In Estonia, alcohol can be revenue stamped in an excise warehouse and customs warehouse.
Revenue stamping is also permitted in a registered consignee’s place of business and in the place of business of persons that receive alcohol released for consumption in another Member State and transported to Estonia for commercial purposes on the condition that the revenue stamps are in such person’s possession at the latest by the date of receipt of the alcohol in the place of business and revenue stamps are affixed on the alcohol promptly.
Alcohol may also be revenue stamped in another Member State and in non-Community countries. Revenue stamped alcohol may only be imported and received from another Member State by the person ordering revenue stamps.
Revenue stamps may be ordered from the Estonian Tax and Customs Board by excise warehousekeepers, registered consignees, alcohol importers and recipients of alcohol released for consumption in another Member State and transported to Estonia. The person ordering revenue stamps must meet the following conditions:
- the person holds a valid excise warehouse activity licence or activity licence of a registered consignee, the importer holds a registration for import of alcohol in the register of economic activities, or the person holds a registration for retail sale, wholesale of alcohol or catering in the register of economic activities, and the Estonian Tax and Customs Board has been notified in writing of receipt of excise goods released for consumption prior to the dispatch of such goods from another Member State;
- the person does not have tax arrears, including tax arrears payable in instalments;
- the person has submitted a security accepted by the Estonian Tax and Customs Board;
- the person has reimbursed to the Estonian Tax and Customs Board for the expense of printing revenue stamps that has been incurred in relation to the return of used revenue stamps (revenue stamps damaged in the course of revenue stamping, revenue stamps removed from sales packaging under supervision of the tax authority, revenue stamps returned while affixed to the product), except if defective revenue stamps are returned;
Revenue stamps are issued in Tallinn at the address Lõõtsa 8a.
Revenue stamps must be affixed to alcohol within 90 calendar days from the date of receipt of revenue stamps from the Estonian Tax and Customs Board. When affixing revenue stamps to alcohol the person ordering such revenue stamps must communicate to the Estonian Tax and Customs Board information on the type of alcohol, ethanol content and quantity. Estonian Tax and Customs Board will verify if the alcohol on sale matches the information that was provided.
If the deadline is exceeded, the person ordering revenue stamps must pay excise duty on the revenue stamps in the amount equal to the amount of excise duty calculated for other alcohol with an ethanol content of 40 per cent by volume and for a sales packaging with a volume of one litre.
The deadline for affixing revenue stamps to alcohol may be extended by another 90 calendar days on the basis of a written substantiated application by the recipient of revenue stamps.
The application of excise duty to revenue stamped alcohol follows the normal procedure.
Persons ordering revenue stamps are prohibited from selling revenue stamps not affixed to alcohol to other persons.
Estonian Tax and Customs Board uses an electronic database for the administration of revenue stamps called MAIS for facilitating the activities related to alcohol revenue stamps. This information system allows persons ordering revenue stamps to submit electronic applications for the issuance of revenue stamps, view the proceedings that revenue stamps undergo in real time, provide notice about operations involving revenue stamps, view electronic reports on the revenue stamps in their use and many other features.
The first six digits of the CN code for denatured alcohol and ester-aldehyde fraction (which is a by-product of the manufacturing of spirits) are 2207 20. Therefore, this product is deemed other alcohol within the meaning of the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act (Alcohol, Tobacco, Fuel and Electricity Excise Duty Act, § 12 (6) 1)).
Denatured alcohol and ester-aldehyde fraction that do not meet the conditions for exemption from excise duty laid down in the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act are subject to excise duty.
Upon transportation of denatured alcohol or ester-aldehyde fraction to Estonia from another country, a person other than an excise warehousekeeper shall, immediately after receipt of the goods, submit an analysis record of an accredited laboratory confirming the compliance of the denatured alcohol or ester-aldehyde fraction with the requirements for exemption from excise duty.
Denatured alcohol and ester-aldehyde fraction are not subject to special requirements for handling alcohol as laid down in the Alcohol Act.
Denatured alcohol is deemed to be completely denatured alcohol or partially denatured alcohol.
Food containing alcohol or a substance meant to be added into the composition of food is quite probably deemed alcohol within the meaning of the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act.
Such food or substance is subject to all requirements applicable to alcohol pursuant to the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act, including the requirement for application of excise duty.