Are you sure you are not a payer right now? With excise duty, it only takes one extra step – a shipment released from a tax warehouse, lost in transit in EMCS, imported in free circulation from the EU, or sold above the stamp duty price – and the obligation to declare and pay taxes is on your desk. And with it, deadlines that are not always lenient. In 2025, add to that increased rates on selected commodities and stricter supervision by Customs.
We offer you a comprehensive guide to excise duty liability: from who is liable and when, through an overview of selected products and key concepts, to the correct determination of when liability arises during production, storage, transport or importation. We are targeting legal entities that are encountering excise duty for the first time in their role as taxpayer, as well as those who need to update their procedures under the Excise Act following the changes effective in 2025.
The subject of excise duty are selected products for which the law provides for special taxation in excess of VAT. The Czech legal system includes mineral oils (e.g. petrol, diesel, LPG), alcohol and spirits, beer, wine and intermediate products, classic tobacco products (cigarettes, cigars, smoking tobacco) as well as new types of tobacco products (e.g. heated tobacco products) and raw tobacco.
In practice, this means that each selected product has its own excise duty rate and its own way of measuring the tax base (e.g. per 1 000 litres for mineral oils, per hectolitre of absolute alcohol for alcohol, per hectolitre and degree of plateau for beer, combination of fixed and percentage for cigarettes, etc.). In normal operation, the taxpayer works with precisely defined codes and the current rates published by the tax authorities.
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
The excise duty payer is not “whoever is selling”, but whoever is obliged to declare and pay the tax under the Excise Duty Act at a particular time. The Act lists the types of roles and situations in which a company (or person) becomes a taxpayer. The key is to correctly identify the moment when the obligation arises and the role of your company in the chain (production, storage, transport, release for free circulation, import, special use). The Customs Administration of the Czech Republic is always the administrator of this tax.
The law explicitly states that a taxpayer is a legal or natural person, in particular a tax warehouse operator, authorised consignee, tax consignor or manufacturer, whose obligation to declare and pay the tax arose in connection with the release of the selected products into free tax circulation or upon loss, destruction or other deterioration of products transported under the conditional exemption regime.
The law also adds additional situations for individual commodities (mineral oils, alcohol, beer, wine and intermediate products, tobacco products, raw tobacco), where the taxpayer is also the person who uses or sells the products for a purpose other than the one for which they were taxed/exempted or who violates a special obligation (e.g. the prohibition of selling cigarettes above the price indicated on the stamp).
Practically: if your company puts goods into free circulation (e.g. releases them from a tax warehouse to the domestic market) – you are a taxpayer and file an excise return for that month. If during a transport under the suspension of duty regime, the loss/break of the regime occurs, the taxpayer is the one responsible for that part of the transport (typically the consignor or the holder of the authorisation, as the case may be).
What is it, how does it work and how is VAT calculated? The next article will tell you.
To make sure you don’t get lost in practice, here is an overview of the most commonly used excise terms:
The selected product is the core of the system. This includes mineral oils, alcohol, beer, wine and intermediate products, tobacco products, as well as raw tobacco, heated tobacco products and other tobacco and tobacco-related products (e.g. e-liquids, nicotine sachets). It is on these commodities that the state imposes excise duty on top of VAT. In practice, this means that you first correctly categorise the goods as selected products and then deal with the calculation and declaration.
Excise duty is administered exclusively by the customs authorities. You file returns and communicate with them.
Under the duty suspension arrangement, the products selected are manufactured, stored and transported without immediate taxation between entities that have the relevant authorisations (typically tax warehouses, authorised consignees/shippers). Tax is only due at the time of release for free circulation. Movements under this scheme must be recorded in the EMCS system.
Free circulation means that the product collected is taxed and can be sold freely to consumers. Since 2023, even free circulation movements between EU Member States have been recorded in EMCS, which has significantly simplified the monitoring and proof of taxation.
The EMCS (Excise Movement and Control System) is the European electronic system for recording and monitoring shipments of selected products. The basic document is the e-AD (electronic Administrative Document). Today, EMCS covers both suspensive relief (RPOD) and VDO shipments.
A tax warehouse is an authorised place where selected products can be manufactured, received, stored or dispatched under the conditional exemption scheme. The operation requires a permit from the customs office and a tax security (guarantee) to cover the risk of non-payment. The general rule is that the production of the selected products, except for exceptions, takes place in a tax warehouse.
The authorised consignee may receive the selected products from another Member State under the duty suspension arrangement outside a tax warehouse. An authorised consignor may, on the other hand, dispatch the selected products from the place of importation to a tax warehouse or other authorised place. These are practical tools for companies that need an RPOD scheme but do not operate a tax warehouse themselves. Transfers are made via EMCS.
The tax guarantee is a financial guarantee required by the administrator, especially for tax warehouses and authorised consignees/shippers. The amount is set by Customs according to the expected volume and risk and the payer must ensure that the security is sufficiently high. Transports or operations under the RPOD procedure shall not be opened without sufficient security.
Release for free circulation is the point at which the product collected leaves the duty suspension arrangement and the obligation to declare and pay tax arises. Typically, it is a release from a tax warehouse for the domestic market, but it is also an import with release under the relevant customs procedure, where the customs declaration acts as a declaration. The correct point of entry determines who is the taxable person and for which period.
The taxable amount of excise duty is the statutory unit on which the tax is calculated after multiplying it by the appropriate rate (tax = base × rate). The specific base varies according to the commodity (e.g. alcohol: hectolitre of ethanol at 20 °C; heated tobacco products: grams of filler per unit pack).
The excise duty rate reflects the method and amount of taxation of the selected products. In the Czech Republic, fixed rates per unit quantity are mostly applied (e.g. CZK/1 000 l for mineral oils at 15 °C, CZK/hl for ethanol, CZK/hl × Plato’s degree for beer, CZK/kg for smoking tobacco). For cigarettes, the rate is combined (fixed part per 1 000 pieces + percentage of the price to the final consumer) and a minimum tax per 1 000 pieces is also set. The resulting tax is calculated as the product of the tax base and the rate.
Yes, for selected tobacco-related products, the law may provide for a regime regardless of nicotine content.
If he has the status of a tax warehousekeeper, authorised consignee/shipper, or is in breach of his obligations during transport in the RPOD/VDO.
You will use the emergency procedures (temporary documents) according to the Customs methodology and then re-pair the shipment in EMCS.
Physical security, measuring equipment (metrology), IT records of batches and movements, inventory process, separation of roles, operator training and crisis scenarios for accidents and IT outages.
The excise tax period is the calendar month unless otherwise provided by law. The taxpayer shall file a separate tax return for each tax.
The excise return shall be submitted by the 25th day after the end of the tax period (i.e. by the 25th day of the following month). The tax is due by the 40th day after the end of the tax year (unless otherwise provided by law). Different deadlines apply for certain special situations (e.g. imports). Excise duty returns are submitted electronically.
The calculation of excise duty on most commodities consists of establishing the tax base (volume in technical unit) and multiplying it by the applicable excise duty rate. In the case of cigarettes, a combination of a fixed and a percentage part with a minimum tax is applied; in the case of beer, it is the degree (Plato) that determines the rate; in the case of alcohol, it is the quantity of pure alcohol in hectolitres of absolute alcohol.
As of 1 January 2025, the excise duty rate on alcohol has increased to 39 100 CZK/hl a. a. This means in practice that 1 litre of 40% alcohol contains 0.4 litres of pure alcohol = 0.004 hl a. a.; tax = 39 100 × 0.004 = 156.40 CZK per 1 litre of 40% alcohol (i.e. 78.20 CZK for 0.5 litres). The calculation of excise duty is therefore always based on the conversion to pure alcohol.
For cigarettes, the law provides for a fixed part per piece + a percentage of the price to the final consumer and a minimum tax per piece. Rates are regularly indexed – there is a further increase in 2025 following the consolidation package. The exact rates, the procedure for determining the price to the final consumer and the current lists are published by the tax administrator. When calculating the tax , you compare the sum of the fixed and percentage parts with the minimum tax and use the higher value.
For most mineral oils, the rate is set per 1 000 litres (some by weight). The excise duty calculation will therefore take into account the quantity put into free circulation and the corresponding rate from the Schedule to the Act.
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
A tax warehouse is a premises (building) where selected products may be manufactured, processed, received, stored or dispatched under a duty suspension arrangement. The operation requires a tax permit and security. Without a licence, products cannot be held under the duty suspension arrangement.
You apply for a tax warehouse permit from the customs office. In the application, you will normally identify the company, a precise description of the premises (address, floor plans, security, measuring equipment), the types of products, the expected volumes and describe the internal control mechanisms (stock records, measurement of losses, responsible persons). The submission is made electronically. The administrative fee is CZK 1 000.
Without security (typically a bank guarantee), the customs office will not issue you a permit. You must provide the security at the latest during the authorisation procedure – if you do not provide it, the authorisation will not be issued or may be revoked. You will not receive a reference code and will not open the shipment in EMCS for RPOD shipments without a guarantee.
Customs will check the premises (security against leakage, metering, lockability, IT records), check the level of security and only then issue an authorisation decision. You can only start actual operations at the authorised site once the decision has become final.
The amount of the tax guarantee is set by the tax authority according to a statutory formula, taking into account the volume and risks. The holder of the permit is obliged to monitor on an ongoing basis whether the guarantee covers the calculated amount of the liability – if the sum of the liabilities for 3 consecutive periods exceeds 3.21 times the guarantee granted, he is obliged to increase the guarantee within 10 days.
It is therefore worth comparing the relevant amounts on a daily basis and increasing the reinsurance immediately if an overrun is imminent. For long-term reliable entities, a reduction or waiver of collateral may be requested.
EMCS (Excise Movement and Control System) is the European electronic system for recording and monitoring the transport of selected products. In EMCS, an electronic accompanying document (e-AD) is issued for transport under the duty suspension scheme. Since 13 February 2023, EMCS is also used for transports in free circulation between EU countries (so-called VDO), which has fundamentally simplified the proof of composition and taxation. EMCS is therefore part of the compulsory equipment of taxpayers who transport selected products across borders within the EU.
The Customs Administration issues summary information on the accompanying documents for the transport of selected products in free circulation within the Czech Republic, on the method of proving taxation and the legitimate acquisition of exempt products, and on the procedures for changes in tax rates. Before dispatching or accepting a shipment, check whether it is an EMCS or free circulation shipment.
Excise duty is not one-way. The law foresees cases where legal entities are entitled to a refund of excise duty – typically for mineral oils consumed for heat production, agriculture, in certain special regimes or for selected entities with special status. However, certain conditions must be met. For example, in the case of refunds on heating oils, the oils must be properly marked and coloured and demonstrably used for the production of heat. The claim is made by filing a special tax return for the refund on prescribed forms.
In practice: you file the excise duty refund claim electronically (data box, electronic signature) and attach as annexes documents according to the specific section (proof of purchase, registration, technical specifications of the equipment, etc.).
From the point of view of the accounting of Czech companies, excise duty is accounted for in account 345 – Other taxes and charges, whereby it is advisable to keep analytics for individual commodities (e.g. 345/1 alcohol, 345/2 mineral oils, etc.). On the buyer’s side, excise duty may be included in the purchase price of inventories.
Do not confuse account 343 (VAT) with excise duty. Excise duty is not deductible as VAT and is not included in the VAT return, but it increases the VAT base when sold to the final customer (i.e. VAT is also calculated on the amount of excise duty).
Excise duty is levied on ‘selected products’ (mineral oils, alcohol and spirits, beer, wine and intermediate products, tobacco products including new forms and raw tobacco) and has a separate base and rate for each commodity. The taxpayer is the person who is obliged to declare and pay the tax at a particular point in time – typically the operator of a tax warehouse on release for free circulation, the authorised consignee/shipper, the producer outside the scheme or the recipient of goods in free circulation from the EU. The tax is usually calculated as the product of the base and the rate. The tax period is monthly, the return is filed by the 25th day of the following month and the due date is usually the 40th day (unless otherwise provided by law).
In practice, ensure that the time of liability and the role in the chain are correctly determined, that shipments are recorded without error (EMCS) and that the tax security is set up and controlled. There are also claims for refunds claimed by a special return with prescribed annexes. In the accounting system, excise duty is accounted for in account 345 with analytics by commodity; it is not deductible as VAT and instead enters into the VAT calculation base at the time of sale.
In practice, the concept of an affidavit in relation to excise duty appears mainly in public procurement as part of proving the basic competence of the supplier (that he has no tax arrears in relation to excise duty recorded in the tax records). Contracting authorities publish a model affidavit in the tender documentation. In this way, the company declares the absence of arrears with the Customs Administration and in the country of establishment if it is foreign. This is not a Customs form but a document for the purposes of the tendering procedure.
Expect interest on late payment and a possible fine. Ask for a postponement/rescheduling without delay, provide reasons and a payment schedule. Do not delay communication with the administrator.
Even if the consumer price is reduced, the resulting tax must not fall below the minimum tax – always compare the combined tax with the minimum tax when calculating.
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
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