Ireland: Department of Finance comments on claims government may be securing up to €100,000 in excise duty and VAT for every acre of malting barley

Ireland’s Department of Finance (DoF) has clarified that the amount of excise duty alcoholic beverages are subject to “depends on the category it falls within, the volume and its alcohol content which is expressed as a percentage of volume”, Agriland reported on July 10.

The clarification follows claims from members of the Irish whiskey distilling sector that the government may be securing up to €100,000 in excise duty and VAT for every acre of malting barley that is dedicated to whiskey production.

Co. Wexford–based malting barley grower, Art Murphy, has estimated that approximately €48,000 is generated in the form of excise duty and various VAT payments for every acre of malting barley.

He has also claimed that an additional €52,000 of tax revenues are generated as whiskey passes along the wholesaling and retail supply chains.

The DoF response to these claims outlined that alcoholic beverages are subject to excise duty in the form of Alcohol Products Tax (APT).

According to the department, APT is an excise duty on the production and importation of alcohol products in Ireland.

Council Directive 92/83/EEC lays down a “harmonised approach for the application of excise duties to alcohol and alcoholic beverages in the EU”.

The directive includes provisions defining categories of alcohol and alcoholic beverages and sets out the basis on which excise duties on such products are to be established.

Chapter 1 of Part 2 of the Finance Act 2003 transposes Council Directive 92/83/EEC and the rates of APT for the various categories of alcoholic beverages are provided for in Schedule 2 of that Act.

A DoF spokesperson told Agriland: “The amount of APT applying to a particular alcoholic beverage depends on the category it falls within, the volume, and its alcohol content, which is expressed as a percentage of volume.

“The tax falls due when the product leaves duty suspension, that is, when it leaves a tax warehouse. A tax warehouse is a premises specially authorised by Revenue to produce, process or store alcohol and other excisable products.

“The person liable for the duty is the tax warehouse keeper or an importer.”

The spokesperson said as a result, it is not possible to estimate the excise duty for certain amounts of raw materials.

“The current rate of excise duty on whiskey is €42.57 per litre of alcohol in the spirits, which equates to approximately €11.92 per 70cl bottle of whiskey at 40% alcohol by volume.

“As the final APT liability will depend on the finished product and its characteristics when released for consumption, it is not possible to verify the excise duty arising for a given level of raw material.

“Revenue publishes statistical information on the incidence of excise duty and VAT that applies to excisable products, which is publicly available,” the spokesperson added.