What’s the deal with posting cigarettes within the EU?
I know we supposedly have free movement of goods and all that, but can I post cigarettes from somewhere cheap (eg Spain) to the UK?
I would think we can, cos otherwise it makes a mockery of this free trade business - but my gut feeling is that European governments will have made sure that this “free trade” principle doesn’t harm their precious tax receipts.
Does anyone know the law here?
Your gut feeling is absolutely right.
You can export cigarettes from Spain to the UK. Upon importation into the UK, you are liable to pay the same excise duties as anyone else importing cigarettes into the UK, or producing cigarettes in the UK. This does not change merely because you use the post office as your method of carriage. There is no import duty if you carry the cigarettes with you across the border and they are for your personal use, but this is the exception rather than the rule.
It doesn’t “make a mockery” of free trade - if the pre-tax price of the cigarettes in Spain is less than in the UK, there is still an advantage to buying your cigarettes in Spain. Hence UK producers are subject to competitive pressures from Spanish producers.
Tax is an area of competence that is reserved to the member states, and they guard it jealously.
This was tried commercialy - Death Cigarettes set up a mail order company in, I think, Belgium. They claimed that the sale was conducted in Belgium so only Belgian taxes should apply. They lost in court.
I don’t know what would be the case if you were to go abroad yourself and mail stuff back home - but why bother when you can carry it back.
Ah, that’s true - I didn’t think of that.
I guess that’s the idea behind the aim to harmonise taxes, eh?
Well, not everybody had adopted the aim of harmonising taxes. In particular there’s not much evidence that many of the member states have and, until they do, that particular project is going nowhere.
But, yes, one of the arguments in favour of harmonising taxes is that different tax rates distort competive forces throughout the market. They mask differences in underlying prices, so that the consumer does not know which product is cheaper, or if tax rates are high enough they make differences in underlying prices irrelevant, so depriving producers of the competitive advantages of efficiency.
Taxes also distort trade flows. The UK and Ireland can - and do - put heavy excise duties on wine, thereby reducing wine consumption. Wine producers suffer as a result, but as there are few if any wine producers in the UK and Ireland, this doesn’t matter to those governments. And of course British and Irish brewers and distillers may benefit from high taxes on wine. Flat rate taxes on all food and drink would allow the consumer to eat and drink whatever he wanted, without regard to where it was produced.