Council Decision (EU) 2020/1790 of 16 November 2020 authorising Portugal to apply a reduced rate of excise duty on certain alcoholic products produced in the autonomous regions of Madeira and of the Azores

What it is

ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion. BACKGROUND: the current decision authorises Portugal to apply excise duty rates reduced by up to 75% of the standard Portuguese rates to rum and liqueurs produced and consumed in Madeira and liqueurs and eaux-de-vie produced and consumed in the Azores. The objective of this measure is to compensate the producers of the Portuguese outermost regions for their competitive disadvantage triggered by the Portuguese outermost regions’ remoteness, insularity, small size, difficult topography and climate and economic dependence on a few products, which severely restrain their development. In view of the fact that the current Decision expires on 31 December 2020, the Commission has launched an external study to evaluate the current regime. The study found that, compared to their counterparts on the mainland, producers in the outermost regions continue to bear higher production costs, which are currently offset by the reduction in the rate of excise duty. The Committee on Regional Development adopted, under the consultation procedure, the report by Younous OMARJEE (GUE/NGL, FR) on the proposal for a Council decision authorising Portugal to apply a reduced rate of excise duty on certain alcoholic products produced in the autonomous regions of Madeira and the Azores. The committee recommended that the European Parliament approve the proposed decision without amendment. As a reminder, the current Council Decision No 376/2014/EU authorises Portugal to apply reduced rates of excise duty of up to 75% of the standard national rate to rum and liqueurs produced and consumed in Madeira and to liqueurs and eau-de-vie produced and consumed in the Azores. The Commission proposes to adopt a new decision authorising Portugal to apply a reduced rate of excise duty in the autonomous regions of Madeira and the Azores. - extends the current derogation by allowing the Portuguese state to reduce excise duty by up to 75% compared to the normal rate on locally produced rum, liqueurs and eaux-de-vie sold in Madeira and the Azores; - introduces a new provision allowing the Portuguese state to reduce excise duty by up to 50% compared to the normal rate on rum, liqueur and eau-de-vie produced in Madeira and the Azores but sold in mainland Portugal. This derogation from taxation rules is justified by its extremely limited scope and by the economic difficulties inherent to production in the outermost regions. The European Parliament adopted by 672 votes to 7, with 8 abstentions, under a special legislative procedure (consultation), a legislative resolution on the proposal for a Council decision authorising Portugal to apply a reduced rate of excise duty on certain alcoholic products produced in the autonomous regions of Madeira and the Azores. Parliament approved the Commission's proposal without amendment. The purpose of the proposal is to adopt a new decision authorising Portugal to apply a reduced rate of excise duty in the autonomous regions of Madeira and the Azores. It allows the Portuguese State: - to reduce excise duty by up…

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