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Managing excise duty refund opportunities


Excise taxes apply to specific goods and services, and they are often seen as an inevitable cost of doing business. But these taxes apply to different products in different countries, sometimes at different stages of the supply chain. In particular, as trade globalizes, domestic excise duties can become ”trapped” as goods and services cross borders. Managing excise taxes and understanding opportunities to mitigate their impact is crucial for all businesses operating in affected industries.

Opportunities to reduce the impact of excise duties also vary between countries. This chapter summarizes some of the common excise taxes, registration requirements and refund opportunities in various jurisdictions worldwide.

What are excise duties?

Excisable products typically have negative effects on health or the environment, or they require long-term national public investment to produce. Common excisable products include gasoline, tobacco and alcohol. Many countries around the world are adding junk food, pollution, landfill, plastic bags and air travel to the list. In effect, these duties are a form of payback for the cost to society of dealing with the harmful effects to society. The main purpose of most excise taxes is to raise revenue; however, increasingly they are also being used to influence consumer behavior.

Excise duties typically apply at a single stage of the supply chain (such as production or at retail sale) and they are not generally available for offset at later stages in the chain. They may apply as a percentage of the value of the goods or services or at a fixed rate (such as a charge per liter or per pack of cigarettes). For imported goods, duties are generally imposed at the time of importation to level the playing field between foreign and domestic products.

Read more about global trends in excise duties
Indirect Tax in 2017 details the findings of an EY 2016 survey of indirect tax subject-matter professionals about existing and upcoming excise taxes being imposed worldwide. It features an interview with Professor Sijbren Cnossen, Erasmus University, Rotterdam, and discusses tax policy options to support climate change and sustainability.

Country insights