Excise Duty on Rum: France vs Overseas Territories – Tax Discrepancy and Regulations

• Rum, an iconic drink from the French West Indies, is subject to a specific tax regime in France
• There is a significant difference in excise rates between mainland France and the overseas territories
• The definition of rum and traditional overseas rum is outlined in EU regulation 2019/787
• Traditional rum produced in Martinique, Guadeloupe, Reunion, and Guyana benefits from specific quotas and tax schemes
• The economic quota regulates annual exports of traditional rum from overseas territories to mainland France
• The fiscal quota allows for a special excise rate on traditional rum from overseas departments consumed in mainland France
• The alignment of overseas rum taxation with mainland France began in 2020 to gradually reach the same rate over six years
• Initially, tax measures were implemented to support the sugar-cane-rum industry in overseas territories due to specific economic constraints
• The EU authorized France to apply a reduced tax rate on traditional rum produced in overseas territories to address production cost challenges.

Source: eurotax.fr

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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