This information material gives a short overview of the main principles of fuel and electricity excise duties, since the topic itself is too voluminous for a comprehensive treatment on this website.
The general arrangement of levying excise duty on fuel and electricity as well as other related rules are laid down in Alcohol, Tobacco, Fuel and Electricity Excise Duty Act (ATKEAS), which is supplemented by other relevant legal acts. More detailed information is available on the website of the Estonian Tax and Customs Board in excise duties section in the Estonian language.
Goods subject to excise duty
Excise duties are imposed on several energy products (sources of energy):
different motor fuels and fuel oils (for example motor spirit, diesel fuel, light and heavy fuel oil etc),
fuel-like products (components and additives of fuels, various chemicals),
solid fuels (coal, lignite, coke and oil shale),
natural gas and electric power.
Different liquid fuels, solid fuels and gaseous fuels are subject to excise duties if used as motor fuel, heating fuel or their additive. Fuels and electricity subject to excise duties are mainly defined through the codes of the Combined Nomenclature of Goods (CN codes) valid as of 01.01.2002.
Activity licences in the field of excise duties depend on the excise goods handled, their status (under an excise suspension arrangement or released for consumption) and related procedures (warehousing, processing etc). Handling fuel under an excise suspension arrangement is only permitted with the relevant activity licence, mostly the excise warehouse activity licence or registered trader activity licence. In Estonia handling fuel released for consumption (taxed with excise duty) requires registration at the Register of Economic Activities, and when selling such fuel, it is also required to provide a security deposit. As a general rule, handling or production of solid fuel, natural gas and electricity does not require excise warehouse activity licence.
Taxation of excise goods
Legal obligation to pay excise duty on fuels usually arises when fuels are released for consumption (e.g. despatched from a warehouse to a filling station), delivered or imported to Estonia from another Member State outside an excise suspension arrangement (taxed with excise duty). In the case of natural gas and electricity a tax liability usually arises upon transmission of gas and electricity from the network to a consumer or upon commencement of use by a network operator, heat and electricity cogeneration producer or a consumer who acquires electricity or natural gas from outside the network.
Excise duty shall be paid by persons listed in ATKEAS, usually either by excise warehouse keepers, deliverers of fuel from another Member State of the EU to Estonia, or natural gas and electricity network operators. As a rule, excise duty has to be paid and declared by the 20th day of the month following the month when tax liability arose.
NB! Upon the obligation of paying excise duty on liquid fuels, also a stockpiling fee of liquid fuel is additionally imposed. Further information is available on the website of the Estonian Oil Stockpiling Agency (OSPA).
Exemption from excise duty and refund of excise duty
Fuel and electricity that is used for certain purposes is exempt from excise duty, for example: fuel used for air navigation in state aircraft or civil aircraft operated for commercial purposes, fuel used for navigation in a ship navigating for commercial purposes outside Estonian waters, fuel and electricity used in various technical processes. Exemptions from excise duty are listed and described in detail in article 27 of ATKEAS. As a general rule a person who uses fuel or electricity for excise- duty-free purposes has to hold a permit for exemption from excise duty on energy.
In certain cases it is possible to apply for the refund of excise duty paid on fuel and electricity, for example excise duty shall be refunded to a person who despatches fuel released for consumption in Estonia into another Member State. Excise duty is not refunded upon the export of fuel released for consumption.
- Alcohol, Tobacco, Fuel and Electricity Excise Duty Act (ATKEAS) valid version in Estonian and it’s English translation
- Rates of excise duty »
- Excise duty section and fuel-electricity excise duty section (in the Estonian language)
- Section of handling the fuel released for consumption (taxed with excise duty) (in the Estonian language)
- Advice on excise matters »
Compiled by Peeter-Tanel Orro, Excise Division