What are the Alcohol Taxes in 2023?

When selling or purchasing wine or spirits, it is crucial to understand the associated costs. This is because any product sold in France or for export is subject to taxes or duties that must be factored in. So, what are the alcohol taxes? We will outline the fundamentals here.

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VAT on Alcohol

The primary tax applied to a bottle of wine or spirits is VAT, or Value Added Tax. This consumption tax applies to all products and services sold in France.

It is an indirect tax, paid by the end consumer and collected by the professional selling the product or carrying out the commercial transaction. This tax must be declared to the public finance department.

Depending on the sector of activity, the nature of the product or service, and the location of the taxable transaction, the VAT rate may vary. It can range from 5.5% to 20%.

VAT on Alcoholic Beverages

Like any product sold in France, beverage sales are subject to VAT. Beverages are subject to different rates, depending on whether they are alcoholic or non-alcoholic.

The tax regime for a beverage depends on its fiscal definition. Alcoholic beverages subject to taxation must meet the following criteria:

• Possess an acquired alcoholic strength by volume greater than 1.2% vol.
• Possess an acquired alcoholic strength by volume of or greater than 0.5% vol. for the specific case of beers.

What is the VAT Rate on Alcoholic Beverages?

By definition, with an alcoholic strength by volume often between 10 and 15%, wine is therefore among the alcoholic beverages subject to VAT. This is also true, of course, for Champagne, sparkling wines, and stronger spirits such as whisky, gin, or rum.

The VAT rate applicable to these beverages is the standard rate of 20%. This applies to takeaway sales, delivery, or on-site consumption.

Excise Duties

Also known as "consumption duties," excise duties are an indirect tax applied to alcohol, as well as tobacco, petroleum, and other luxury or polluting products.

Excise duties are applied to the quantity of products sold, not their value. They are paid on behalf of consumers or retailers by importers or authorized warehousekeepers.

To certify the payment of excise duties, a duty-paid capsule (CRD) is affixed to a wine bottle. However, since June 1, 2019, this capsule is no longer mandatory for wines and Champagne; in such cases, the seller must justify customs payment by attaching the Simplified Accompanying Document (DSA) to their goods.

What is the amount of excise duties on alcohol?

The amount of excise duties varies depending on the tax category of the alcoholic beverage. Still wine, sparkling wine, cider, natural sweet wine, beer, etc., do not have the same consumption duties.

Each year, the amount of consumption duties is set by a ministerial decree.

In 2023, duty rates increased by 1.6% due to 2021 inflation.

For wines and spirits, the rates are as follows:

• Still wines: €3.98 / hl
• Sparkling wines: €9.85 / hl
• VDN (natural sweet wines) and VDL (liqueur wines): €49.73 / hl
• Rums from French Overseas Departments (DOM): €917.72 / hlap (hectoliter of pure alcohol)
• Other spirits: €1834.42 / hlap

The social security contribution

In addition to VAT and excise duties, alcoholic beverages with an alcohol content exceeding 18% vol. are subject to a third tax: the Social Security Contribution. Established in 1983, this contribution is allocated to financing health insurance. It was created "due to the health risks associated with the immoderate consumption of these products".

Similar to excise duties, social security contributions are remitted by authorized importers or bonded warehousekeepers for the consumer.

What is the amount of the social security contribution (CSS) for alcohol?

Similar to consumption duties, social security contribution rates fluctuate based on the product's tax classification. These rates are calculated per volume of beverage released for consumption for intermediate alcoholic products (€ / hl), and per volume of pure alcohol for spirits (€ / hlap).

In 2023, the social security contribution (CSS) rates are as follows:

• Alcohol exceeding 18% vol.: €589 / hlap
• Intermediate products exceeding 18% vol. - Full rate: €49.73 / hl
• Intermediate products exceeding 18% vol. - Reduced rate at 40%: €19.91 / hl
• Beers exceeding 18% vol.: €49.73 / hl
• Rums and spirits based on local alcohol: €403 / hlap

Special case: Corsica

The VAT, excise duties, and social security contributions outlined above are applicable to the specified beverages within mainland France.

There is an exception concerning the territory of Corsica.

Indeed, in Corsica, alcoholic beverages sold in restaurants, bars, or cafés benefit from a reduced VAT rate when consumed on-site. This rate is 10%.

For takeaway or delivery sales, the 20% rate applies as standard.

Practical case study: taxes on a bottle of wine in 2023

To better understand and clarify the situation, here is a practical case applied to a 75 cl bottle of wine with an alcohol content of 15% vol., sold in France for €20 (including all taxes) in 2023.

• VAT = €3.33
• Social security contribution = none, as the beverage has an alcohol content of less than 18% vol.
• Excise duties = €3.98 / hl, or €0.02985 for a 0.75 l bottle.

For a bottle sold at €20 (including all taxes), the total tax amount is €3.359, representing approximately 16.79% of the total price.

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