Increase in excise taxes on wine this year. Raising excise taxes on wine is a disservice to honest winemakers - opinion. How is it different from VAT?

Illustration: polit.info

The Russian government's proposal to increase excise tax rates on wine is another typical example of officials' concern for domestic business. Theoretically, the proposed measures are designed to help Russian winemakers producing high-quality drinks from their own grapes - they are promised a tax deduction. However, an increase in the excise tax will inevitably lead to an increase in the price of all wines, which, given the low purchasing power of the population, cannot be called an incentive for winemakers who are experiencing a protracted decline in sales. As a result, the winners will be producers of illegal alcohol, as well as importers of cheap, low-quality wine, who, as the practice of recent years has shown, have perfectly learned to adapt to the rapidly changing conditions on the Russian market. The correct measure to support Russian winemaking in the crisis situation in which the industry finds itself would be to limit the import of wines with a low level of quality control (for example, from Georgia), but honest domestic producers can only dream of such measures.

According to amendments to the Tax Code, which the government submitted to the State Duma, starting from 2020, it is proposed to increase the excise tax on still wines from 18 to 31 rubles per liter and on sparkling wines - from 36 to 40 rubles per liter. One of the motivations for justifying such a measure is the need to comply with WTO standards, which require equal excise tax rates on Russian and imported wines.

Currently, for wines produced from Russian grapes (categories PGI - protected geographical name and ZNMP - protected name of origin), there is a reduced excise tax rate of 5 rubles per liter. In principle, this is the right decision, creating significant preferences for companies developing full-cycle production. The return on investment in winemaking is very long (a new vineyard produces its first fruits suitable for processing only four to five years after planting), and the share of full-fledged domestic wines in retail chains is still significantly lower than in many wine-producing countries. Therefore, Russian winemaking cannot do without various incentive measures from the state.

The government does not abandon the very idea that wine made from Russian grapes should enjoy tax benefits. But now, as a preferential mechanism, it is not a reduced excise tax that is proposed, but a tax deduction for manufacturers - after the excise tax has already been paid and included in the cost of the bottle on the store shelf. It is this point that causes great doubt among winemakers.

“The proposal is not completely clear - or rather, its implementation,” comments a representative of one of the large wine companies. - In particular, it is assumed that after the excise tax is increased from 18 to 31 rubles per liter, if own grapes were used to produce wine, the difference of 13 rubles will be returned to the manufacturer. If this is PGI/ZNMP wine, then the difference in return will be 25 rubles (so that the excise tax is equal to the current 5 rubles per liter). Moreover, even if these are purchased grapes, the seller/producer of the wine material will receive such a difference of 13 rubles. It is assumed that the increase in excise duty should not affect the selling price of wine, because the difference will be returned to the manufacturer.

But this is unlikely to happen - for several reasons. Firstly, if the increase is not included in the selling price, then the wine producer may go into the red, since compensation for the difference in excise tax will take place “someday,” and he needs to pay 31 rubles for excise tax now. Secondly, the price increase will happen in any case, since VAT of 20% is calculated on the price of a bottle of wine plus the increased excise tax. Thirdly, in the case of purchased wine materials, if the wine producer does not increase the price, he will definitely go into the red, since even this belated compensation will not go to him, but to the producer of the grapes/wine materials."

The business organization OPORA RUSSIA also criticized the measures proposed by the government. The letter sent to her to the Ministry of Finance of the Russian Federation states that the planned amendments to the Tax Code could negatively affect the wine industry. The maximum excise tax rate, which will correspond to demand and purchasing power, should not exceed 25 rubles per liter, the organization believes. At the same time, its increase should occur progressively: a one-time increase should not exceed the level of 20 rubles per liter, followed by indexation by 1-2 rubles per year.

“We call to stop the growth of the tax burden, because the industry has only just begun to recover. Even if you raise taxes, you need to do it gradually, over a long period. Imagine that your income tax was 13 percent, and in six months 26 percent will be deducted from your salary. How can one treat this?” said the head of OPORA RUSSIA. Alexander Kalinin.

A significant increase in the rate could lead to an increase in prices by 15-20%, especially in the low price category, the organization noted in a letter to the Ministry of Finance. As a result, the buyer will begin to perceive Russian wines as an expensive product, and will also see a significant price distortion compared to European countries, where wine costs 2-4 euros per bottle, in contrast to 600 rubles in Russia. The decrease in the availability of wine products contradicts the concept of reducing alcohol consumption, which, in particular, involves the population switching to drinks with lower alcohol content, the authors of the letter also remind.

The arguments of “SUPPORT OF RUSSIA” look completely justified, especially if we remember the situation in which the domestic wine industry found itself as a result of the 2014 crisis. Previous crises with ruble devaluation (1998 and 2008) helped domestic wine producers, who immediately gained a serious advantage over imports. However, the double devaluation of the ruble at the end of 2014 stimulated demand for Russian wine for a relatively short time. The return of inexpensive foreign wines to store shelves was facilitated by retail chains, which began to actively create their own structures involved in importing wines, and were also able to find new foreign suppliers willing to offer competitive prices. Therefore, the positive effect of devaluation for Russian winemakers was quickly exhausted - now they again have to compete with imports without any significant price advantage.

Already in 2017, Russian winemakers experienced a serious decline in production: 31.9 deciliters (dal) of wine were produced in the country, which was largely due to the weather factor. But in 2018, the decline continued - in 11 months, 4.7% less wine was produced than a year earlier, and this time the main contribution to this was made by the falling purchasing power of the population, coupled with the return of relatively inexpensive imports. In addition, there are more and more cheap substitutes for natural wines on the shelves - the so-called wine drinks without added alcohol (VN BDES), which are constantly increasing their market share. According to the Center for Research of the Federal and Regional Alcohol Markets (CIFRRA), for 4 months of this year, their sales volume amounted to 8.546 million decaliters, an increase of +11.26%, or 0.865 million decaliters. For comparison, sales of still wines (excluding the HoReCa segment - hotels, restaurants, catering) increased by only 1.32% to 16.65 million decaliters, and sparkling wines fell by 0.83% to 4.54 million decaliters.

“Consumer interest in wine drinks is growing at a rapid pace within the constant volume of wine products. Apparently poverty is winning. But since wines and sparkling wines have not actually fallen, it is not poverty that is winning, but the growing interest in wine products among the poor, for whom wine and sparkling wines are still unaffordable today,” states the head of CIFRRA. Vadim Drobiz.

It is easy to guess that an increase in the excise tax on wine will primarily hit the wallets of this category of consumers, who are sensitive to even a small increase in prices. Current prices for “wine drinks” are around 150 rubles per bottle - this is the same 2 euros for which you can buy a bottle of full-fledged wine in a supermarket in France or Germany. It is wine, and not a “wine drink”, in the composition of which the wine material occupies only a certain proportion. Of course, with a competent approach to the development of the industry, this lower price segment is practically inexhaustible, and the replacement of “wine drinks” with inexpensive, but quite high-quality wine could become one of the most important tasks of the national alcohol policy. But the government seems to have other priorities.

“Today I am more concerned about the mass market of economy wine - what will happen to it, to the consumers of this sector? - Vadim Drobiz continues. - You can’t offend them - they’ll spit and leave the market for factory wine products. And if the state thought like a state (as it did in the Soviet period, although the word “marketing” could only be read in the journal “Science and Life” in translated Western articles), it would urgently create a segment of cheap port wines for Russian men (up to 120 rubles at retail for 0.75 liters at 20% strength). Just 10-15 years ago, this product segment exceeded 20 million decaliters per year. Let them produce it at the state-owned factories of Rosspirtprom if there is any concern about the alcohol in the product. And the product would not compete with anyone (except illegal vodka and other surrogates).

For consumers in the higher price segment - wines costing in the range from 300 to 600 rubles - the increase in excise tax will obviously not be so painful, but this measure is unlikely to reduce the share of imported wines on the shelves, if not vice versa. Russian winemakers are still forced to work within the framework of the general federal law “On state regulation of the production and turnover of ethyl alcohol, alcoholic and alcohol-containing products” (FZ-171), and they have to compete with winemakers from countries where regulation of this industry is much more flexible, and the cost of production, as a result, is much lower than in Russia. As the latest crisis has shown, there are plenty of new inexpensive niches for imports into Russia on the world wine market. For example, in recent years, wines from Portugal and Macedonia have become very noticeable in networks - countries that were previously very poorly represented in the Russian mass market. Now their products are a direct competitor to Russian wines in the mid-price category.

A special story is Georgian wines, which are also successfully fighting for the Russian consumer, who spends a lot of money on alcohol. “The popularity of Georgian wine among the Russian middle class has grown sharply in recent years - significantly even by 2005. Then there was cheap Georgia (over 50% of the volume) not only for the middle class, which now does not exist,” states Vadim Drobiz.

However, it should be recognized that in many ways this popularity of Georgian wines is based on the weak wine culture of Russians. Hardly the majority of buyers of Georgian wines, which are by no means cheap, wonder about the origin of the wine material in bottles with such well-known names as “Khvanchkara”, “Kindzmarauli” or “Tvishi”. Despite the fact that Georgia positions itself as a wine-producing country, no national system of control of wine materials by place of origin has ever appeared there. Therefore, when purchasing wine with a well-known brand, there is no guarantee that this wine was produced and bottled in the exact area indicated by its name (which is what wine connoisseurs value in wine). In Russia, by the way, such a system has been actively developing in recent years - today the PGI and ZMNP labeling is already used by both large producers and small wineries. But they still have to compete with the same Georgian wines, often of obscure origin. And at the same time with the so-called “wines of Abkhazia”, which, as is well known to everyone more or less immersed in the subject of wine, represent Moldovan material of very dubious quality.

The question of whether the embargo on Georgian wines should be reintroduced in connection with the recent events in Tbilisi is certainly debatable. A complete ban on the import of Georgian wine would be a serious blow to companies that have been developing this business for many years and most often had nothing to do with politics. However, a fundamental formulation of the question of the quality and origin of Georgian wines entering Russia is necessary, first of all, for the sake of the interests of those domestic producers who seriously care about their reputation and brand. Wine is one of the most important elements of marketing a territory, and if some producers play by the rules established in world practice, while others defiantly violate these rules, then we are simply faced with unfair competition - again, outside of any politics. Georgia, of course, has every right to dispose of its wine brands as it pleases - no one is going to take away the right to kindzmarauli and tvishi from it. However, this does not mean that products that mislead the buyer should be sold en masse on the Russian market (and it would be good if this Georgian wine was produced in Georgia, and not in some Bulgaria). The same, however, applies to a number of other popular wine brands - from Crimea and Abkhazia to Chianti and Bordeaux. One way or another, regulation of the wine market is much more about the reputation and good name of the producer than about excise taxes, so as long as the government sees winemaking as just another “cash cow,” all the efforts of our honest producers will remain in vain.

Nikolay Protsenko

MOSCOW, November 17 – RIA Novosti/Prime. The State Duma, having approved an increase in excise taxes on wine, provokes a 10% increase in prices and thus deals a blow to 75% of Russian consumers of wine products, says Vadim Drobiz, head of the Center for Research of Federal and Regional Alcohol Markets (CIFRRA).

Dear bubbles: who needs rising champagne prices?The State Duma decided to increase excise taxes on champagne. Experts assure that budget revenues will be minimal, and such a decision will only harm market players and consumers. The production of sparkling wines is declining, and the share of wine in the structure of alcohol consumption is also falling - it is being replaced by beer and spirits.

State Duma deputies on Wednesday, in the second reading, approved in 2017-2019 an increase in excise taxes on sparkling wines (champagnes) of an unprotected geographical indication (made from foreign raw materials) and refused an additional increase in the excise tax rate on wines made from Russian grapes. Thus, the excise tax rate on sparkling wines (champagnes) will increase to 36 from 26 rubles per liter, and the excise tax on sparkling wines will increase to 14 from 13 rubles, as provided for in the Tax Code. Even in the first reading, an increase in the excise tax on still wines from 9 to 18 rubles was approved, while the excise tax on wine from Russian grapes remained at 5 rubles.

The editors of the first reading set excise tax rates for sparkling and champagne wines at 27 rubles for 2017-2019, and 14 rubles for protected wines. For other wines it was proposed to set a rate of 18 rubles, and if they are protected - 10 rubles. However, United Russia deputy Evgeny Fedorov introduced an amendment to the bill for the second reading, which proposed increasing excise taxes on sparkling wines (champagnes) to 36 rubles for 2017-2019, and if they are protected - to 19 rubles. This amendment was initially recommended by the Budget Committee for adoption.

Didn't think

“What did the State Duma do without understanding it? It raised prices for all cheap wine products, which now cost up to 150 rubles per bottle and occupy 75% of the market. The cheapest normal wine from Russian grapes probably costs 120 rubles, after this decision it will cost 150 rubles. If champagne and sparkling wine today are set at 164 rubles (the minimum retail price for champagne - ed.), after this increase it will already be 185 rubles. This is a lot, although it seems like nonsense for consumers," says Drobiz.

The director of Abrau-Durso does not see much benefit from increasing excise taxes on wineEven if the upward price movement is small, this will lead to a reduction in consumption and sales will clearly decrease, predicts Vladimir Maslovsky.

According to him, when making the decision to increase excise taxes, the deputies “did not think.” “They decided that all our wines now would be protected, but today we have practically none, and in the future it is unlikely that the market for this wine will be more than 10% of the volume, as in any country in the world, where the maximum is 15% of high-quality wine, everything else is an ordinary product. These wines are expensive, and they will not be cheap after this decision,” warns Drobiz.

According to his forecasts, now producers and consumers will begin to switch to wine drinks. “It’s more profitable to produce them, they’re cheaper, the population drinks them with pleasure, but this is already an incomprehensible product, GOST allows it to be produced from God knows what, there doesn’t have to be a sufficient amount of wine material. It’s legal, safe, you won’t get poisoned with it, but it’s not even close not wine,” the expert believes.

A table with excise tax rates for 2017 is given in this material for accountants. Current rates for excisable goods are necessary for the correct calculation and transfer of the required amount to the budget.

Types of bets

Excise tax rates depend on the type of goods and are established for 2017 by Article 193 of the Tax Code of the Russian Federation.
Goods recognized as excisable are listed in paragraph 1 of Article 181 of the Tax Code of the Russian Federation. Excise goods include:

• ethyl alcohol from all types of raw materials;
• alcohol-containing products (solutions, emulsions, suspensions and other types of products in liquid form) with a volume fraction of ethyl alcohol of more than 9%;
• alcoholic products (drinking alcohol, vodka, liqueurs, cognacs, wine, beer, drinks made from beer, and other drinks with a volume fraction of ethyl alcohol of more than 1.5%);
• tobacco products;
• cars;
• motorcycles with engine power over 112.5 kW (150 hp);
• motor gasoline;
• diesel fuel;
• motor oils for diesel and (or) carburetor (injection) engines;
• straight-run gasoline;
• benzene, paraxylene, orthoxylene;
• aviation kerosene;
• natural gas.

Calculation options

Excise tax rates for 2017 for each type of excisable goods are established by Article 193 of the Tax Code of the Russian Federation. However, options for calculating excise taxes in 2017 may be different. It depends on the form of setting the rate. We provide explanations for the different calculation options.

Excise taxes 2017
Firm rates	Combined bets
The amount of excise duty on excisable goods for which fixed (specific) tax rates are established is calculated as the product of the corresponding tax rate and the tax base calculated in accordance with Articles 187-191 of the Tax Code of the Russian Federation.	The amount of excise duty on excisable goods for which combined tax rates have been established (consisting of fixed (specific) and ad valorem (as a percentage) tax rates) is calculated as the amount obtained by adding the excise tax amounts calculated as the product of the fixed (specific) tax rate and the volume of sold (transferred, imported) excisable goods in kind and as a percentage of the maximum retail price of such goods corresponding to the ad valorem (as a percentage) tax rate.

Excise tax rates for each type of excisable goods are established by Article 193 of the Tax Code of the Russian Federation. The amount of excise duty on excisable goods for which fixed (specific) tax rates are established is calculated as the product of the corresponding tax rate and the tax base calculated in accordance with Articles 187-191 of the Tax Code of the Russian Federation.

Excise tax rates for 2017: general table

From January 1, 2017, a number of changes were made to paragraph 1 of Article 193 of the Tax Code of the Russian Federation. In particular, excise tax rates on ethyl alcohol, alcohol and tobacco products have increased. For example, rates for cider, poiret and mead will increase to 21 rubles. per 1 liter (in 2016 it was 9 rubles per 1 liter), and rates for cigars will be 171 rubles. for 1 piece (in 2016 it was 141 rubles for 1 piece). The corresponding amendments are provided for by Federal Law No. 401-FZ dated November 30, 2016.

Since 2017, electronic nicotine delivery systems, liquids for electronic nicotine delivery systems and tobacco (tobacco products) intended for consumption by heating have been added to the list of excisable products (new subparagraphs 15 - 17, clause 1, article 181 of the Tax Code of the Russian Federation). Thus, an excise tax on vaping was introduced in 2017. For more information about changes in excise taxes since 2017, see "".

Ethanol
Types of excisable goods			Tax rate
Ethyl alcohol from food or non-food raw materials, including denatured ethyl alcohol, raw alcohol and distillates (wine, grape, fruit, cognac, Calvados, whiskey)	When selling to manufacturers:
	· alcohol-containing perfumery and cosmetic products in metal aerosol packaging;
	alcohol-containing household chemical products in metal aerosol packaging
	When selling advance excise duty to payers (including ethyl alcohol imported into Russia from the territories of member states of the Customs Union, which is a product of the Customs Union)
	When transferred within the structure of one organization for the production of alcoholic or alcohol-containing excisable products in accordance with subparagraph 22 of paragraph 1 of Article 182 of the Tax Code of the Russian Federation
	When transferred by manufacturers within the structure of one organization or when selling for production goods that are not recognized as excisable in accordance with subparagraph 2 of paragraph 1 of Article 181 of the Tax Code of the Russian Federation
	When selling to organizations that do not pay advance excise tax (including ethyl alcohol imported into Russia, which is not a product of the Customs Union)		107 rub. for 1 liter of anhydrous ethyl alcohol contained in excisable goods
	When transferred within the structure of one organization to carry out transactions recognized as subject to excise taxation, except for ethyl alcohol:
	– which is transferred within the structure of one organization for the production of alcoholic or alcohol-containing excisable products in accordance with subparagraph 22 of paragraph 1 of Article 182 of the Tax Code of the Russian Federation;
	– which is sold (transferred within the structure of one organization) for the production of goods that are not recognized as excisable in accordance with subparagraph 2 of paragraph 1 of Article 181 of the Tax Code of the Russian Federation;
	– which is sold for the production of household chemicals and alcohol-containing perfumes and cosmetics in metal aerosol packaging
Alcohol-containing products
Types of excisable goods		Tax rate
Alcohol-containing perfumery and cosmetic products in metal aerosol packaging		0 rub. for 1 liter of anhydrous ethyl alcohol contained in excisable goods
Alcohol-containing household chemical products in metal aerosol packaging		0 rub. for 1 liter of anhydrous ethyl alcohol contained in excisable goods
Alcohol-containing products (except for perfumes and cosmetics and household chemicals in metal aerosol containers)
Alcohol products
Types of excisable goods	Tax rate
Alcohol products with a volume fraction of ethyl alcohol over 9 percent (except for beer, wines, fruit wines, sparkling wines (champagnes), wine drinks made without the addition of rectified ethyl alcohol produced from food raw materials, and (or) alcoholized grape or other fruit must , and (or) wine distillate, and (or) fruit distillate)	523 rub. for 1 liter of anhydrous ethyl alcohol contained in excisable goods
Alcohol products with a volume fraction of ethyl alcohol up to 9 percent inclusive (except for beer, drinks made from beer, wines, fruit wines, sparkling wines (champagnes), cider, poiret, mead, wine drinks made without the addition of rectified ethyl alcohol, produced from food raw materials, and (or) alcoholized grape or other fruit must, and (or) wine distillate, and (or) fruit distillate)	418 rub. for 1 liter of anhydrous ethyl alcohol contained in excisable goods
Wines, fruit wines (except for wines with a protected geographical indication, with a protected designation of origin, as well as sparkling wines (champagnes), wine drinks made without the addition of rectified ethyl alcohol produced from food raw materials, and (or) alcoholized grape or other fruit wort, and (or) wine distillate, and (or) fruit distillate)	18 rub. for 1 l
Wines with a protected geographical indication, with a protected designation of origin, except for sparkling wines (champagnes)	5 rub. for 1 l
Sparkling wines (champagnes), except for sparkling wines (champagnes) with a protected geographical indication, with a protected designation of origin	36 rub. for 1 l
Sparkling wines (champagnes) with protected geographical indication, with protected designation of origin	14 rub. for 1 l
Beer with a standard (standardized) content of ethyl alcohol by volume up to 0.5 percent inclusive	0 rub. for 1 l
Beer with a standard (standardized) content of ethyl alcohol by volume over 0.5 percent and up to 8.6 percent inclusive, as well as drinks made on the basis of beer, produced without the addition of ethyl alcohol	21 rub. for 1 l
Beer with a normative (standardized) content of ethyl alcohol by volume over 8.6 percent	39 rub. for 1 l
Cider (alcoholic products containing ethyl alcohol not more than 6% of the volume of the finished product, produced as a result of fermentation of apple must and (or) reconstituted apple juice without the addition of ethyl alcohol with or without saturation with carbon dioxide)	21 rub. for 1 l
Poiret (alcoholic products containing ethyl alcohol not more than 6% of the volume of the finished product, produced as a result of fermentation of pear must and (or) reconstituted pear juice without the addition of ethyl alcohol with or without saturation with carbon dioxide)	21 rub. for 1 l
Mead (alcoholic products containing ethyl alcohol from 1.5 to 6% of the volume of the finished product, produced as a result of fermentation of honey wort containing at least 8% honey, with or without the use of honey for sweetening and other beekeeping products, plant raw materials, with with or without the addition of sugar-containing products, without the addition of ethyl alcohol)	21 rub. for 1 l
Tobacco and tobacco products
Types of excisable goods	Tax rate
Pipe, smoking, chewing, sucking, nasvay, snuff, hookah tobacco (except for tobacco used as raw material for the production of tobacco products)	2520 rub. for 1 kg
Cigars	171 rub. for 1 piece
Cigarillos (cigaritas), bidis, kretek	2428 rub. for 1000 pcs.
Cigarettes, cigarettes	1562 rub. for 1000 pcs. + 14.5% of the estimated cost, determined based on the maximum retail price (but not less than 2123 rubles per 1000 pcs.)
Tobacco (tobacco products) intended for consumption by heating	4800 rub. for 1 kg
Electronic nicotine delivery systems	40 rub. for 1 piece
Liquids for electronic nicotine delivery systems	10 rub. for 1 ml
Cars and motorcycles
Types of excisable goods	Tax rate
Passenger cars with engine power up to 67.5 kW (90 hp) inclusive	0 rub. for 0.75 kW (1 hp)
Passenger cars with engine power over 67.5 kW (90 hp) and up to 112.5 kW (150 hp) inclusive	43 rub. for 0.75 kW (1 hp)
Passenger cars with engine power over 112.5 kW (150 hp)	420 rub. for 0.75 kW (1 hp)
Motorcycles with engine power over 112.5 kW (150 hp)
Petroleum products
Types of excisable goods	Tax rate
Automotive gasoline:
not corresponding to class 5	13,100 rub. for 1 t
class 5	RUB 10,130 for 1 t
Diesel fuel	6800 rub. for 1 t
Motor oils for diesel and (or) carburetor (injection) engines	5400 rub. for 1 t
Straight-run gasoline	13,100 rub. for 1 t
Benzene, paraxylene, orthoxylene*	2800 rub. for 1 t
Aviation kerosene	2800 rub. for 1 t
Middle distillates	7800 rub. for 1 t

The Federal Law “On Amendments to Parts One and Two of the Tax Code of the Russian Federation and Certain Legislative Acts of the Russian Federation” (At the time of preparation of this material, the details of the Law (Bill No. 11078-7) were not known) (hereinafter referred to as the Law) introduced a number of amendments to Ch. 22 of the Tax Code of the Russian Federation. Some of them will undoubtedly have a significant impact on the tax burden of business entities in 2017. Details below.

The list of excisable goods has been expanded

According to the Law, in order to stimulate a healthy lifestyle of the population, the list has been supplemented. In particular, in paragraph 1 of Art. 181 of the Tax Code of the Russian Federation names three new goods:

• pp. 15 - electronic nicotine delivery systems (in other words, electronic cigarettes). These are defined as disposable electronic devices that produce aerosol, vapor or smoke by heating a liquid for inhalation by the user;
• pp. 16 - liquids for electronic nicotine delivery systems (any liquid containing liquid nicotine in a volume of 0.1 mg/ml);
• pp. 17 - tobacco (tobacco products) intended for consumption by heating.

The rules for exemption from excise duty have been changed

Until now, paragraph 2 of Art. 184 of the Tax Code of the Russian Federation allowed for the possibility of exemption from excise duty when selling excisable goods outside the territory of the Russian Federation only upon presentation to the tax authority or without it in the cases specified in clause 2.1 of the said article.

In 2017, they will be able to receive this exemption if they submit a surety agreement to secure the obligation to pay taxes. This opportunity will be given to them by the new clause 2.2 of the said article.

For tax purposes, this agreement has the following features:

1. in accordance with the civil legislation of the Russian Federation, agreement between the tax authority and the guarantor(by a third party, not necessarily a credit institution), in a form approved by the Federal Tax Service (clause 2 of Article 74 of the Tax Code of the Russian Federation).
2. The validity period of the guarantee agreement provided for the purpose of exemption from excise duty must be at least ten months from the date of expiration of the established deadline for the exporter to fulfill the obligation to pay excise tax and no more than one year from the date of conclusion of the guarantee agreement (paragraph 5, clause 2.2, article 184 Tax Code of the Russian Federation).

For your information. Operations for the issuance of sureties (guarantees) by a taxpayer who is not a bank, due to the new paragraph. 15.3 clause 3 art. 149 of the Tax Code of the Russian Federation are not subject to taxation.

The guarantor himself, on the date of submission of the application for concluding a guarantee agreement, must meet the requirements established by the provisions of the new clause 2.2 of Art. 184 Tax Code of the Russian Federation:

• be a Russian organization;
• for the last three years preceding the year of submission of the said application, pay a total of taxes (VAT, excise taxes, income tax and mineral extraction tax) in the amount of at least 10 billion rubles. (this amount does not include taxes paid in connection with the movement of goods across the border of the Russian Federation and as a tax agent);
• the amount of his obligations under existing guarantee agreements (including the guarantee agreement in relation to the taxpayer) must not exceed 20% of the value of his net assets, determined as of December 31 of the calendar year preceding the year in which the said application was submitted;
• not be in the process of reorganization or liquidation, as well as in the stage of bankruptcy, have no arrears in paying taxes, fees, penalties and fines.

So, a guarantee from other organizations (not banks) will become a full-fledged alternative to a bank guarantee to exempt the exporter from paying excise duty. Corresponding amendments were made to paragraph 3 of Art. 184 of the Tax Code of the Russian Federation, which determine the procedure for excise duty reimbursement. Let us add: the new rules apply to surety agreements that ensure the fulfillment of tax obligations, the payment of which falls due after July 1, 2017 (Clause 12, Article 13 of the Law).

Excise tax rates are indexed

The law indexed excise tax rates for 2017 and determined excise tax rates for the planning period 2018 - 2019. In particular, the excise taxes established by paragraph 1 of Art. 193 Tax Code of the Russian Federation:

• from 9 to 18 rub. per liter - for wines, with the exception of wines with a protected geographical indication, with a protected designation of origin, as well as sparkling wines (champagnes), fruit wines, wine drinks made without the addition of rectified ethyl alcohol produced from food raw materials, and (or) alcoholized grape or other fruit must, and (or) wine distillate, and (or) fruit distillate;
• from 9 to 21 rub. per liter - for cider, poire and mead;
• from 26 to 36 rub. per liter - for sparkling wines (champagnes), with the exception of sparkling wines (champagnes) with a protected geographical indication, with a protected designation of origin.

Excise tax rates on wines with a protected geographical indication, with a protected designation of origin, sparkling wines (champagne) and beer remain for 2017 at the previously approved level.

Prices for gasoline of the 4th and 5th classes, as in 2016, will contain an excise tax of 13,100 and 10,130 rubles. per ton respectively.

The excise tax on diesel fuel in 2017 will increase from 5,293 to 6,800 rubles. per ton and will increase annually (in 2018 - up to 7,072 rubles, in 2019 - up to 7,355 rubles per ton).

For tobacco products intended for consumption by heating, the excise tax rate in 2017 will be 4,800 rubles. per 1 kg of heated, pipe, smoking, chewing, snuff and hookah tobacco. From 2017 to 2019, the excise tax will increase annually: in 2018 - 5,280 rubles, and in 2019 - 5,808 rubles. for 1 kg.

From 2017, manufacturers and importers of electronic cigarettes will also have to pay excise duty. For 1 ml of nicotine-containing liquid, his rate will be 10 rubles. (11 and 12 rubles in 2018 and 2019), and one electronic cigarette will become at least 40 rubles more expensive. (by 44 rubles in 2018, by 48 rubles in 2019).

At the same time, the new clause 9 of Art. 194 of the Tax Code of the Russian Federation introduces an increasing coefficient T to the specific excise tax rate on cigarettes, and (or) cigarettes, and (or) cigarillos, and (or) bidis, and (or) kretek.

If these products are sold in September - December in volumes exceeding the average monthly sales volume for the previous calendar year, this coefficient is calculated using the formula:

T = 1 + 0.3 x (Vnp - Vsr) / Vnp

• Vnp - the volume of excisable goods sold by the organization during the tax period;
• Vav - the average monthly total volume of sales of the specified excisable goods in the previous calendar year (determined by dividing the total volume of sales of excisable goods for the year by 12).

In other cases, the value of the coefficient T is taken equal to 1.

Let us add: the increasing coefficient was introduced in order to ensure uniform receipt of excise taxes from the sale of these tobacco products throughout the year, since currently the main share of sales of these products occurs at the end of the year.

The procedure for applying deductions has been adjusted

In accordance with paragraph 2 of Art. 200 of the Tax Code of the Russian Federation, the amounts of excise tax paid by the taxpayer when importing into the territory of the Russian Federation excisable goods that have acquired the status of goods of the Customs Union, subsequently used as raw materials for the production of excisable goods, are subject to deductions.

But when calculating the excise tax on alcohol-containing products and alcoholic products (with the exception of natural wines, including champagne, sparkling, carbonated, effervescent, natural drinks made from wine materials produced without the addition of ethyl alcohol), the specified tax deductions are made within the amount of the excise tax calculated for excisable goods used as raw materials, produced on the territory of the Russian Federation, based on the volume of goods used (in liters of anhydrous ethyl alcohol) and the excise tax rate established by clause 1 of Art. 193 of the Tax Code of the Russian Federation in relation to ethyl and cognac alcohols sold to organizations paying an advance payment of excise tax.

In the case of using excisable goods imported into the territory of the Russian Federation as raw materials in the production of alcoholic and excisable alcohol-containing products, tax deductions are made within the amount of the excise tax calculated based on the volume of goods used (in liters of anhydrous ethyl alcohol) and the excise tax rate established by paragraph. 1 tbsp. 193 in relation to ethyl and cognac alcohols sold to organizations that do not pay an advance payment of excise duty.

Thus, in order to apply tax deductions, the following criteria must be met:

• excise tax must be presented;
• excise tax must be paid;
• excisable goods (raw materials) must be used as raw materials.

Deductions of excise tax amounts are made in part of the cost of the corresponding excisable goods used as the main raw material, which is actually included in the costs of production of other excisable goods, accepted for deduction when calculating corporate income tax (clause 3 of Article 201 of the Tax Code of the Russian Federation).

But how to determine the amount of the deduction in a situation where the purchased excisable goods in the tax period were simultaneously used as raw materials for the production of both excisable and non-excisable goods, in Chapter. 22 of the Tax Code of the Russian Federation is currently not specified.

To eliminate this uncertainty, the Law in paragraph 2 of Art. 200 of the Tax Code of the Russian Federation introduces a new paragraph, which states that the procedure for determining the amount of deduction in such a situation must be determined by the taxpayer himself and fixed in the tax accounting policy. You can make changes to the accepted procedure:

• when production technology changes;
• from the beginning of a new tax period, but not earlier than after the expiration of 24 consecutive tax periods.

YEREVAN, November 8 – Sputnik, Maria Sheludyakova. In Russia, from January 1, 2017, excise taxes on wine will be doubled. Vadim Drobiz, head of the Center for Research on Federal and Regional Alcohol Markets, told Sputnik how hard indexation will hit suppliers from the CIS countries and Georgia.

Excise taxes are indirect taxes on consumer goods. Their cost is always included in the cost of goods. For Russians, an increase in excise taxes means another increase in prices. Next year, the excise tax on wines (without alcohol content) will double.

Prices are expected to increase for all wines, with the exception of sparkling and champagne, fruit wines and wine drinks. On average, the cost of one bottle of red and white wine will increase by 7.5 rubles. For products made from imported grapes, an increase from 9 to 18 rubles is provided.
Many experts believe that an increase in excise taxes on wine will hit the producers themselves, but Drobiz does not agree with them. Excise taxes will have almost no effect on imported wines, he is sure; Russian producers will be most affected. At the same time, Drobiz emphasized that the share of imported wine in Russia currently does not exceed 25%: “There will be no revolution due to an increase in excise taxes.”

Due to the devaluation of the ruble and the fall in real incomes of Russians, wine imports have fallen sharply, including from the CIS countries and Georgia. Importers focused on the Russian market have deliberately reduced supply volumes in recent years, fearing that they will not be able to sell the previous volumes at an increased price.

"Akhasheni" and "Khvanchkara"

Today in Russia there is simply no cheap wine from the CIS countries, the expert emphasized. Ukrainian wine has disappeared from Russian shelves, and there is almost no Azerbaijani wine left. The leaders in supplies are currently Abkhazia, Georgia, Armenia and Moldova, but we are talking about extremely small volumes.

The increase in excise taxes will not affect the volume of supplies of Georgian wine, because it is already expensive in Russia. If the price increases a little, it’s not a big deal, the Russian consumer won’t notice it, the expert believes.

“In 2016, supplies of this wine to Russia increased by almost 40%, but earlier, in 2015, they fell by half. Therefore, imports of Georgian wine in Russia are minus 25% compared to 2014. Increased excise taxes have an impact on Georgian wine will not,” concluded Drobiz.

Elections in Moldova will show

Moldovan wine comes to Russia only from Gagauzia, and the issue of supplies from this country is of a political nature. There is now 60% less Moldovan wine in Russia than in 2005. However, the increase in excise taxes will affect Moldovan producers more significantly than importers from Georgia, because it is much cheaper.

“The elections in Moldova will show whether there will be Moldovan wine in Russia. The leader of the Socialist Party, Igor Dodon, wins - exports to the Russian Federation will go, they will elect another president - most likely, it will not. In any case, the previous volumes will only be provided that the Russian-Moldovan issue is resolved ", the expert emphasized.

There won’t be a significant blow for Armenia, because Armenian wine in Russia is already not cheap at all: “If a bottle of Armenian wine goes up by 20 rubles, that’s not fatal.” And the volumes on the Russian market are absolutely ridiculous, Drobiz emphasized, about two million liters.
Since 2015, Abkhazian wine has been among the leaders in the Russian imported wine market, but it is also quite expensive.

How much should a bottle cost?

The head of the Center for Research of Federal and Regional Alcohol Markets calls wine a bottle of which costs less than 200 rubles as cheap. In his opinion, a bottle of good wine from real grapes in Russia could cost 120 rubles, but pricing is influenced by the dollar exchange rate, and after the devaluation of the ruble (end of 2015), there simply cannot be cheap imported wine in the Russian Federation.

“Some dudes are sure that good wine cheaper than 500 rubles does not exist at all. But 90% of Europeans drink wine that costs about one or two euros per bottle - in France, Italy, and Spain. By the way, the Spaniards published the TOP 10 "Inexpensive, but very good wines in Spanish chain supermarkets. The first place was taken by wine for 1.4 euros. So good wine can be cheap," the expert said.

There are a lot of cheap wines in the European Union, because subsidies per liter amount to 1 euro, which makes it possible to significantly curb prices, Drobiz also noted.

At the same time, according to the calculations of the head of the Research Center, 80% of Russian consumers do not afford wine that costs more than 200 rubles. Twelve years ago there were Russian, Ukrainian, Moldavian, Bulgarian and Romanian wines in the same price category. Now, due to the dollar exchange rate, Russian wine has no competitors in the segment of inexpensive wines.

“The very fact of increasing excise taxes is unpleasant. It turns out that the state does not support domestic producers and the emerging culture of wine consumption,” he noted. “And now Russians drink five times less wine than in the Soviet period. We need not only to plant vineyards, but also to convince the population, re-educate them and try with all their might to reduce the price of wine with subsidies.”

From January 1, 2017, Russia is also expected to slightly increase excise taxes on gasoline and tobacco products (including electronic cigarettes).