How to move excise goods within the Baltic states
The implementation of council directive 92/12 of Feb. 25, 1992, on the general arrangements for products subject to excise duties and on the holding, movement and monitoring of such products, significantly amended the regulatory framework on the imposition of alcohol, tobacco and fuel excise duties in the Baltic states. The following paragraphs provide insight into the practical movement of excise goods in the three countries.
To be sure, there are several effective ways for a foreign company to move excise goods within the Baltic states. Each type of movement depends on the company's business objective. Excise goods can be moved under an excise duty-suspension arrangement between tax warehouses. In particular, this means that excise goods can be moved from a tax warehouse located in one of the member states to a tax warehouse located in another member state without an obligation to pay excise duties. The excise duty will be chargeable at the moment the goods are released into free circulation - i.e., upon termination of the excise duty-suspension arrangement. The authorized warehouse-keeper will be required to pay excise duties at the moment the excise goods are dispatched from the tax warehouse without being subject to excise duty-suspension arrangement.
If a foreign company is engaged in the active marketing of excise goods in the Baltic states, it is recommended that it be registered as a trader in each of the three countries. A registered trader is a natural or legal person without authorized warehouse-keeper status and authorized by the director of the customs board to receive, in the course of his business, products subject to excise duties from another member state under duty-suspension arrangements. However, a registered trader may neither hold nor dispatch excise goods under an excise duty-suspension arrangement. A registered trader is obliged to pay excise duties upon receipt of any excise goods subject to excise duty-suspension arrangement. Since a registered trader generally disposes excise goods on a regular basis there should not be any difficulties with the prompt payment of excise duties.
A foreign company can also deliver excise goods to the Baltic states that have already been released into free circulation in the country of dispatch. The same possibility is available for excise goods already released into free circulation in the Baltics. The procedure for the movement of excise products already released into free circulation is very similar throughout the European Union; therefore, the excise duties must be paid in the country of destination. Afterward, there is a procedure available for the refund of excise duties in the country of dispatch.
If a foreign company does not have sufficient administrative presence in Estonia, it is advisable to appoint a tax representative who will apply for the refund of excise duties. A tax representative is required when a foreign company is engaged into distance selling of excise goods in Estonia.
