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Excise duty on coal – important amendments to tax law (Customs and Excise Duty Alert – 6/2013)

Excise duty on coal – the amended law will come into force at the end of August or beginning of September 2013.

On 12 July 2013, the Polish Parliament passed an act amending the provisions of the Excise Duty Act related to excise duty on coal products (hereinafter referred to as the “Amendment”) introducing a number of significant changes to the current rules on excise duty on coal products.
The amended law introduces significant changes to the system of taxation of coal products with a view to simplifying trade in such products. The amendments will include abolition of some arduous documentation requirements and exemption of some transactions from excise duty.

Amended Excise Duty Act

The Amendment introduces the term “end-buyer of coal” (hereinafter referred to as the “End-Buyer”) and changes the current definition of the “coal agent” (hereinafter referred to as the “Coal Agent”).
It is worth pointing out that the status determined on the basis of the Excise Duty Act will determine, among other things, which coal products are taxed, which can be purchased on a free-of-tax basis and which are exempt from excise duty.

Changes in the list of activities subject to excise duty

The Amendment introduces significant changes to the list of activities involving coal products that are subject to excise duty.

Exclusion from excise duty

In the light of the Amendment, domestic trade in coal products between Coal Agents, import, export, delivery and purchase of such products within the EU will qualify for exemption. In addition, the provisions of the Act will not apply to the export and delivery of coal products by End-Buyers within the EU.  As a result, some transaction subject to the Amendment should be exempt from excise duty.

Activities subject to excise duty

The following will be subject to excise duty:
• Domestic sale of coal products to the End-Buyer;
• Purchase and import of coal products by the End-Buyer within the EU;
• Use of coal products by the Coal Agent and End-Buyer;
• Coal product wastage.

Exemptions from excise duty

The Amendment does not change the list of exemptions of coal products if they are used for specific purposes.  At the same time, the legislator has chosen to change the terms and conditions of exemptions from excise duty by abolishing the requirement of appending coal product relocation with a proof of delivery, which simplifies the existing system of trade in coal products. However, the new terms and conditions will have to be met in order to qualify for exemption from excise duty.  As a consequence, the Amendment will have a significant impact on the existing system of documenting trade in coal products because parties to coal product transactions will have to comply with new rules and requirements.

Other amendments

1. The Amendment also provides that the Coal Agent selling coal products to the End-Buyer in the territory of Poland will have to keep a register of coal products sold.  Such a register will have to include information required under the Act.  The Coal Agent will also have to keep a register of coal products used that are exempt from excise duty as a result of their intended use, as well as coal products used that are not subject to exemption.
2. In addition, the legislator has abolished the requirement of keeping a register of coal products used by their users for purposes that are subject to exemption.
3. The Amendment also introduces significant changes to the method for settlement of coal product wastage.  The new definition of coal product wastage provides that only coal product wastage occurring during transportation will be considered as coal product wastage under the Excise Duty Act.
4. The Amendment will also include changes in the rules on excise duty exemption of coal product wastage through ultimately abolishing the requirement of obtaining individual limits on wastage by individual taxpayers and replacing them with standards for wastage levels set by directives of the Minister of Finance.

Short vacatio legis period

Please note that the Amendment is now awaiting the Polish President’s signature.  We would also like to emphasise that the new law will come into force 30 days after its publication in the Journal of Laws.  We should expect that the Amended Excise Duty Act will come into force at the end of August or the beginning of September 2013.
Considering the short vacatio legis period, it is recommended that necessary steps be taken as soon as possible to be adequately prepared for the new legal environment shaped by the new provisions of excise duty law in respect of coal products.


Job Title:
Łukasz Janiga
Job Title:
Menedżer, Dział doradztwa podatkowego
+48 (12) 394 43 23
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