Since 1 April 2011 the amendments to the Liquid Fuel Act entered into force.
The latest amendments to the Liquid Fuel Act (hereinafter LFA) that entered into force from 1 April 2011 involve also additional requirements to the persons engaged in handling of fuel.
These amendments include registration of fuel handlers in the Register of Economic Activities (in Estonian: majandustegevuse register, hereinafter MTR), provision of a security for value added tax, entering of more detailed data in the accompanying document of fuel and specific obligations for a seller of fuel and excise warehouse keeper.
Registration of fuel handlers in MTR
Since 1 April 2011 the Estonian Tax and Customs Board (hereinafter ETCB) is registering the fuel handlers in MTR. A person intending to sell, import, export or provide fuel storage services has to submit the respective application for registration to ETCB. The registration application may be drawn up in the electronic environment entering the MTR portal via X-road services for an entrepreneur. The electronically prepared application must be digitally signed and sent at the e-mail address: mtremta.ee. The registration application may also be drawn up on paper carrier and delivered to a regional tax and customs centre of the applicant’s location (see Contacts).
Before submitting a registration application the state fee in the amount of 19,17 euros for each activity to be registered must be paid in one of the following bank accounts of the Ministry of Finance, indicating the reference number 2900082236 on the payment order:
MTR registration is not required if the fuel is transferred in an excise warehouse, tax warehouse, customs warehouse or free zone, or if the fuel is sold on the basis of a contract for use of a motor vehicle for the purposeful use as specified in the contract.
Forms of registration applications and of the applications for amendment of the registration data and the relevant guidelines are accessible on the MTR home page: www.mkm.ee/mtr and on the home page of ETCB www.emta.ee in section Ärikliendile (Business client) > Kütuse käitlemine (Fuel handling).
A fuel importer, exporter, or a provider of fuel storage services will be registered in MTR within 5 working days as of the receipt of the application, provided that the registration application was drawn up in conformity with the requirements and contains the correct data. If the application does not meet the requirements or contains incorrect data, the registration will be made within 5 working days as of the date when the corrections were made in the application. Registration data will be made available on the MTR home page www.mkm.ee/mtr. Registration of the sale of fuel is described further on in a separate section.
The person having a registration in MTR for fuel import or export or provision of fuel storage services must once a year (from January 15 up to April 15) send the confirmation on the accuracy of the registration data. If a fuel handler fails to meet this requirement, the registration of a respective activity will be suspended on May 1 and will be cancelled on November 1.
Please note that the registrations for sale of fuel entered in MTR before 1 April 2011 will be valid until 31 May 2011. The persons who intend to continue their activities after this date are not required to pay the state fee upon submission of the new registration application, but they have to send the confirmation on the authenticity of their registration to sell fuel latest by April 15. Failure to confirm the data will automatically bring about the suspension of the registration for sale of fuel in MTR starting from May 1. Confirmation of the registration in MTR is done in the same way as submitting of the registration application.
Registration for sale of fuel
Only a company that has provided a security to ETCB and whose share capital is at least 31 950 euros or who has a valid liability insurance contract in the amount of 31 950 euros for compensation of any material damage that might be caused to third persons through the activities of the fuel handler has the right to sell fuel. The above-mentioned requirement concerning the amount of the share capital does not apply to the companies selling only liquid gas.
The requirement for providing a security does not apply to sellers of fuel who are handling only aviation fuels or liquid gas.
Since 1 April 2011 an applicant who intends to sell fuel must submit the registration application together with the supplementary information to ETCB (legal basis: subsection 14 (1) of LFA). Since April 1 the registrations to sell fuel have been divided in two parts: sale of fuel that has been released for consumption where the amount of security required from a fuel handler is 100 000 euros, and sale of fuel to be released for consumption where the amount of security required from the fuel handler is 1 000 000 euros. Depending on the type of registration, the applicant has to tick a respective box.
The person will be registered in MTR as a seller of fuel within 5 working days as of the date of providing the security. A security is deemed to be provided from the moment of its acceptance by ETCB.
The tax authority has the right, relying on risk assessment, to require a bigger amount of security than 100 000 euros or 1 000 000 euros from a seller of fuel. It is also allowed to reduce the amount of a security required from a seller of fuel for fuel that has been released for consumption.
Legal basis for requiring of the bigger security amount is provided in subsection 42 (4) of LFA. The decision will be made on the assumption of a person’s VAT liability that may be incurred; on the basis of a business or other activity plan of the person; depending on a person’s solvency and previous conduct in meeting the deadlines established for payment of taxes; relying on a person’s previous experiences in handling of fuel; having in mind the business partners and business reputation of a person; taking into account the violations of tax laws, provisions of LFA or customs rules previously committed by the person or a member of the management or control bodies of a person’s company; and based on the data or documents submitted by a person certifying the person’s conformity to the requirements established in subsection 3 (1) of LFA.
Reduction of the security amount below the limit prescribed by law (100 000 euros) is possible only if a person meets all the conditions set out in subsection 42 (5) of LFA: a person has impeccable business reputation and at least three years of experience in fuel handling; a person or a member of the management or control bodies of his company have not within the past three years committed repeated violations of tax laws, provisions of LFA or customs rules; no offence proceedings have been commenced in respect of the above-mentioned persons for violation of tax laws, provisions of LFA or customs rules; a person has no tax arrears or tax arrears to be paid by instalments. A person eligible for reduction of the security amount has to submit the respective application to ETCB.
A person whose area of activity is to sell fuel to be released for consumption under the required security limit of 1 000 000 euros may submit the request for reduction of the security amount starting from 1 January 2013, except the persons whose fuel turnover is less than 30% of the average monthly turnover of chemical products other than fuel, as well as the persons handling only shale derived fuel oil or the persons whose fuel turnover other than shale derived fuel oil is less than 20% of average monthly turnover of shale derived fuel oil and who meet all the conditions established for fuel handlers in subsection 42 (5) of LFA. The said persons have the right to submit the request for reduction of the security amount starting from 1 April 2011.
The registrations for sale of fuel entered in MTR before 1 April 2011 are valid until 31 May 2011.
Pursuant to LFA, a security is deemed to be provided after its acceptance by ETCB. The persons whose security ETCB has accepted latest by 31 May 2011 will be registered in MTR.
The tax authority recommends a person who wishes that his/her registration for sale of fuel would be continued after 31 May 2011 to submit the registration application already in April 2011. Submission of the registration application in good time enables to spare the time spent on the provision and acceptance of a security in case a registered security over movables or a mortgage will be provided to secure the business.
Types of security
The person who is obliged to provide a security may choose between the following types of security (legal basis: § 122 of the Taxation Act):
Information about the persons who are accepted by ETCB as surety is accessible on the home page of ETCB: Ärikliendile (Business client) > Toll (Customs) > Tagatised (Securities).
Requirements for fuel purchasers
Pursuant to subsections 191 (1) and (2) of LFA that entered into force since 1 April 2011, it is prohibited to purchase fuel from a seller of fuel who has no valid registration to sell fuel. Purchasers are required to check in MTR if the seller has a valid registration to sell fuel. Checking of the data is not required if fuel is purchased from filling stations.
If a purchaser of fuel who has also the registration in MTR to sell fuel fails to meet the established requirements, then ETCB has the right to cancel the MTR registration of such person to sell fuel.
Obligations of an excise warehouse keeper
In accordance with § 192 of LFA, since 1 April 2011 an excise warehouse keeper is required to verify if a person who intends to release fuel in consumption has a valid registration in MTR to sell fuel. ETCB wishes to draw your attention to the circumstance that excise warehouses can and will start with such verification only from 1 June 2011 due to the situation that the registrations to sell fuel that have been entered in MTR before 1 April 2011 will be valid until 31 May 2011, which means that excise warehouses cannot meet the above stated requirement before June 1.
Since 1 June 2011 an excise warehouse may release the fuel of a person who has no registration to sell fuel for consumption only after this person has provided a confirmation to the warehouse keeper containing the following data: name of the person; first name and surname of the person’s representative, his/her personal identification code, signature and date; confirmation that the fuel that will be released for consumption will not be sold, but will be used for personal consumption.
An excise warehouse keeper is required to deliver the data of such persons (name, registry code, date of fuel delivery, type and quantity of fuel) immediately by e-mail to ETCB at the address: aktsiisiladuemta.ee.
ETCB may suspend the activity licence of an excise warehouse that has repeatedly failed to meet the above stated requirements for up to six months.
Amendments concerning the accompanying documents of fuel
Since 1 April 2011 additional requirements have been established for preparing of the accompanying documents for fuel.
According to § 6 of LFA, a seller of fuel or a person who dispatches or delivers the fuel to the depositary or depositor shall draw up the accompanying document for sale, transportation or delivery of the fuel to the depositary or depositor. Drafting of the accompanying document is not required for the sale of fuel in a filling station. The requirements arising from the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act apply to the accompanying documents upon dispatch of fuel from an excise warehouse.
The accompanying document must enable to identify the type and quantity of fuel. Among other additional requirements the accompanying document must contain also information about the carrier of fuel, such as the business name and registry code of the carrier, first name and surname of a driver of a motor vehicle, and registration number of a motor vehicle, as well as the address of the place of loading or unloading of fuel.
The accompanying document must always be carried along at the transportation of fuel. A seller of fuel shall keep the accompanying document of fuel at every place of business in which the fuel is sold and shall submit the accompanying document immediately to an official exercising supervision, on the request of the official.
If a supervisory authority establishes that fuel is handled not in conformance with the requirements set out in § 6 of LFA, the person who was in possession of the fuel from which the sample was taken shall compensate the supervisory authority for the documented expenses specified in subsection 27 (2) of LFA.
For questions, please contact Marika Suvi, Chief Tax Auditor of the Audit Department by e-mail at marika.suviemta.ee or by phone at (+372) 676 1723.