- “Yes. Thank you very much for these questions, which allows me to clarify already. Now all tobacco products are subject to the MCs, the European movement and control system that controls. It's their movement across Europe. And, uh, we are proposing to include also tobacco in that in this field there is already cooperation among member states. Moreover, there is a specific regulation that um, regulates administrative cooperation in the field of tax collection, including excises. Plus, there is the activity of Olaf, whose mandate is to crack down on the illicit trade in tobacco on behalf of the EU. And finally we have Europol that is also has investigative powers to look into that. So we have a hierarchy from the simple control to administrative cooperation than investigative powers and uh inter member states cooperation for criminal offences. That ensures that all levels of cooperation is are covered in order to respond to all levels of threats.”
Smoking regulation · Anti-money laundering regulation · EU competences on taxation
- “And of course, the opinion of this chamber will be taken in due account. So I would just like to reassure the honourable member that health was not the only objective we took into account. Coming to the second aspect, the mentioning of fiscal sovereignty. Of course, it's a very political issue, but here we have not been as political as it may look, because what you have mentioned, the possibility to update every three years refers to the attraction of inflation. You have seen how in the past three years everything has changed. And had we adopted a proposal of this kind three years ago, it would already be heavily outdated. So we have proposed a delegated act Procedure because it is the quickest way to follow suit to something which is quite automatic, which is the level of inflation and has no real impact on the fiscal sovereignty of member states because it is an objective aspect. I hope I have replied to your questions.”
EU competences on taxation
- “Thank you. I will start as I think the questions were directed to me particularly, I would like to remind that taxation of tobacco products are already existing. It's already taxed since many, many years and the main objective of the proposal is not health related. It is related to the internal market. It is related to the avoidance of distortions that could lead consumers to move across the single market to profit from, um, more, uh, convenient rates in other countries, so we did not base our new proposal. Although we took into account the health aspect, we did not base the inclusion of the new products only on health. We were, first of all, looking at the existing distortions among member states that don't know how to tax products that are clearly substitutes to the ones that are in the scope of the directive. And then we have been given guidance clearly in defining the way in which taxation is, um, expressed. We have been very ambitious taking into account also the health related problem. But, you know, this proposal is subject to unanimity. So it is a very ambitious base that gives a message, gives a hint, but then member states will be able to discuss.”
EU measures on lifestyle-related behaviours (smoking, drinking, eating, etc.) · EU Single Market harmonisation
- “Thank you very much. Just a very final concluding remark to say that we fully understand the importance for EPPO to cooperate with Eurofisc. So to have our two guests today to be working together more and more, and we need to change the legal basis for that. We are working on that. We welcome and support those Member States eight at the moment that are on a voluntary basis, anticipating these measures by giving access to the EPPO. It's in the interest of everyone, in the interest of the Member States, in the interest of our citizens that don't see their money wasted in the interest of the institutions that are protecting this. Thanks.”
Anti-money laundering regulation · EU law enforcement cooperation in criminal matters
- “It would make it easier for authorities in order to enforce the rules that they are supposed to oversee, and also for our international partners, we will find it easier to understand. All these simplifications have the effect of not undermining the effectiveness of Cbam, and I will explain why before doing so, let me tell you that this is only the first step of a, um, procedure, that of a strategy that we want to implement. The first one being this simplification, the second, a comprehensive report on a possible review of the sebum regulation that would consider its possible extension to other sectors of the ETFs that are exposed to strong carbon leakage. Extension to possible downstream products. Extension to possible indirect emissions and then possibly in the beginning of next year, if necessary, some legislative proposals will come to amend the Cbam regulation itself to expand its scope. This is the first step and will make it possible to have all the others. Because the link is simple, if we are going to make it easier for companies to adapt, and we are going to limit the plethora of importers that will be subject to cbam, authorities will be able to concentrate on the big importers, thereby targeting better their efforts to tackle circumvention and directing better the control. Why do I say that? We can limit the plethora of importers? Because the most important element of the proposal is the introduction of a de minimis threshold exemption.”
Carbon Border Adjustment Mechanism (CBAM) · Carbon leakage support
- “Thank you very much, chair. Fight against VAT fraud is a definite priority. We have been losing between 12.5 billion to 32.8 billion between 2010 and 2023, as this fraud happens in the internal market. The cooperation is absolutely key. It's not possible, in fact, to detect this kind of fraud from a purely national perspective. In particular, this is important because very often the VAT fraud is linked to other kinds of fraud and illicit activities like financing of terrorism or money laundering. That's why it is impossible for the national authorities to fight against this phenomenon all alone. We have been working to facilitate cooperation among member states since a very long time, and our efforts are not only expressed in the regulation of 104, which is the basis for Member States to exchange information, but also for eurofisc and to exist and function. But also we have other tools like the transaction network analysis, which is called TNA as well. And this tool was able to, um, find uh 12.7 billion in 2023 of fraudulent transactions to detect them and stop them, and led to the deregistration of 2350 VAT numbers because they were involved in fraudulent transactions. Sysop, which collects also analyze information of the payments of cross-border payments and most recently, the VAT. In the digital age. We would like to cooperate more with the EPPO and with the other customs and anti-fraud entities that exist in the European scenario, Olaf, Europol and we are evaluating the regulation in order to enhance this exchange of information, the timing for that, and I can come back to that if there are questions, is still to be decided, but that is clearly in clearly in our plans and we are working on that. We stand ready to cooperate as from now. Thanks.”
Anti-money laundering regulation · VAT harmonisation
- “Thank you very much. I can be even shorter. Mr. president, I would really like to thank you. We value very much the opinion of of the European Parliament. Uh, even in the process of unanimity, of course, um, this proposal tries to strike a balance across the needs to ensure harmonisation in the lower level, that you may agree that would be achieved and to try to fight against fraud, but also to take into account what is happening in terms of gateway to smoking. Even products that have no nicotine are being popular now with young children, and they are, uh, sure way to pick up smoking in a heavier way later in life. So we are particularly Close to this directive because for once, our taxation competence is coupled with a bit of a superior effect on public health, and we hope that this is going to be taken into account beyond pure economic interests that we understand are very important as well. So thanks again for this invitation. And we, of course, remain at your disposal. Any kind of technical questions you may have? Thank you.”
Smoking regulation · Electronic cigarettes · Restrictions of flavours in tobacco products
- “Thank you very much. You have referred to the impact assessment, but please allow me to read exactly from the impact assessment what is said, because as you know, impact assessments are drafted on the basis of available information. And I read there are no consolidated statistics on tobacco retailers in the EU, while Eurostat statistics identify 60,181 retailers of tobacco products, industry sources and national reports concerning a sample of nine member states provide an estimate of 133,000 tobacco shops and another 90,000 points of sales like gas stations, bars and restaurants supermarkets, outlets. So this is only one part of the story, and clearly it's quoted because Eurostat is Eurostat, we quoted among other elements we were able to find, and we stated clearly that there are no consolidated statistics on in this field. Secondly, internal market. Unfortunately, I don't have time here to make a full lecture on internal market. I will just make a I will just make one example. When something is taxed 0 in 1 member state, is small and highly valuable and is taxed highly in another member state. The push to move from one member state to the other in order to purchase such kind of goods is very high, and this is a distortion of the member state. This is a regulated in the treaty of the EU, and it is the reason why we exist, why there is indirect taxation that aims at reducing distortions of internal market. So I don't see how and not having this kind of measures would increase even the level of distortion to the internal market. And finally, may I remind you that this is not the only field of taxation in which this is happening. We are having the same kind of rules in alcohol taxation, in all energy sources, and most of all in VAT, which applies to any service and goods supplied in the European Union. Thank you very much.”
EU measures on lifestyle-related behaviours (smoking, drinking, eating, etc.) · VAT harmonisation
- “Thank you very much, dear president and honourable members, colleagues, I am very happy to be here today, and I would like to thank you for the invitation. I would like to start by giving you some background to the changes that are really proposed into the Tobacco Taxation Directive. Then I will give a brief description of the main points of the proposal and discuss the main impacts on both revenue and health. On the 16th of July, the Commission has adopted a revision of such a directive. This is a crucial step towards reducing smoking rates, protecting young people and bringing Europe closer to a tobacco free generation in the EU alone. Tobacco is responsible for nearly 700,000 deaths every year. Around 50% of smokers die prematurely. Additionally, new nicotine products are attracting young users. Taxation has contributed to a 40% decline in smoking rates over the last decade, but outdated minimum rates are Undermining future progress. This revision is an opportunity to contribute to improving citizens health across the European Union. However, alongside protecting public health, the revision will ensure the proper functioning of the single market. It will assist in fight against fraud and it will help safeguarding member states revenues. There are three main policy interventions contained in the proposal. First, the minimum excise rates for traditional tobacco products will be revised. Second, the scope of the directive will be extended to include new products like e-liquids, heated tobacco, and nicotine pouches. Tobacco will also be included in the scope of the directive in terms of control of movement, not of taxation. First new minimum rates. As I have mentioned, taxation has played a key role in reducing tobacco use.”
Smoking regulation
- “We are also going to simplify sebum for those that will remain nonetheless subject to the sebum application. And this will be the authorization procedure that will be made simpler. The emission calculations that is going to be made easier, and the decision on where to put the financial liability of sebum. Finally, also reporting requirements will be made easier. I would just like, in the interest of time, to zoom in only three examples to make you understand what kind of simplifications we are talking about. First of all, we are going to set default carbon prices in order to facilitate the declaration of a carbon price paid already abroad on third countries. Carbon price should not be paid twice and we can establish for each countries what is the average carbon price paid there according to their legislations and then reported into some default Values also what we call the 80% rule that obliges importers to buy beforehand at least 80% of what will be their future responsibility in terms of carbon emissions, and therefore certificates will be changed in order to adapt the requirement to the real needs of each importer. 2026 will also be a period in which the the certificates for the emissions imported in that time will be due, but only as from the following year.”
Extension of the EU Emissions Trading Scheme · Carbon Border Adjustment Mechanism (CBAM)
- “So in 2026 we will concentrate on the application and the purchase of certificates. Plus their surrendering will take place in 2027. I think we all think in the commission that this will simplify the life of importers, the life of the authorities, the life of our partners established in third countries still will make sibambe not less, but more effective because it will be much better targeted. We would then like to invite this institution and its honorable members to assess the proposal in the due time, and to adopt its negotiating position in this framework. Time is of the essence. As you all know, Sibambe is now subject to a transitional period, which is going to end on this year. And if we want this simplification to be applicable on the day of entry into force of the definitive regime on the 1st of January 2026, we need to swiftly adopt them. Should this not be the case, Sibambe will of course be applicable on the 1st of January 2026, but according to its current rules, meaning without the proposed simplification. Therefore, we count on your support. We look forward to the discussion and we stand ready to address now. And also after this meeting, anytime you see suit all the questions you may have. Thank you very much.”
Carbon Border Adjustment Mechanism (CBAM) · EU policy on custom fee on non-EU imports
- “Currently, the only possible exemption to the Cbam regulation to the Cbam obligations is the €150, which applies to the non-application of customs duties for all imports of all nature into the European Union. This threshold is clearly not apt for the Cbam application, and not apt in general for the application of the customs regulations, and that's why in the customs reform proposal it is proposed to abolish it. We have then seen that 90% of the Cbam importers were actually, uh, responsible for not even 1% of the global emissions that were tackled, Thereby making it very difficult for those small importers and very difficult for the authorities that are supposed to that are supposed to control them. That's why with the threshold that is expressed in accumulative terms for mass per importer per year, it's going to be much easier to apply. Cbam. So all the importers who are importing less than 50 tonnes of carbon goods in one year will not be subject to cbam application and obligations. This, as I said, will relieve 90% of the eligible importers but will only exclude 0.73% of corresponding emissions. We of course, have a review close to be able to check whether the application is giving rise to circumvention loopholes and how to address and to address them.”
Extension of the EU Emissions Trading Scheme · Carbon Border Adjustment Mechanism (CBAM) · EU policy on custom fee on non-EU imports
- “Thank you. Chair. The honorable members of this House who expressed their opinion and asked questions. I will take the questions one by one, one by one, in the order in which they were asked. And I will start with the remark by the honourable member that it would have been better as CO2 threshold, and then to transform it into mass. The example you are quoting is is correct. It's not wrong. However, we had to balance effectiveness and accuracy and we had to choose which way to go. We have considered that the amounts are so minimal. As I said, taken in global terms, they are only reaching 0.73% of the emissions. That having to check the CO2 content of what has been produced abroad would not have amounted to a simplification, because this would have given the same obligation to check this kind of, uh, factor that we currently have for those that will be under cbam. On the contrary, what is indicated as the threshold element is something which is already in the customs declaration. So it is already known to whomever is importing those goods. And it makes it extremely easy to just transfer the same value from the customs to the cbam panorama. The second aspect concerning the distinguished having to distinguish between SMEs and multinationals. First of all, it would have been complicated to look at the size of companies. The definition of SMEs varies constantly and the size of companies varies over time.”
Extension of the EU Emissions Trading Scheme · Carbon Border Adjustment Mechanism (CBAM)
- “Moreover, this is also, as I may recall, what is used in the VAT area with for exemption threshold. It is looked at the turnover in in a year's time, not at the size of the company itself. I would just end by saying that, according to our calculations, more than 75% of those that would be exempted under these rules will be SMEs anyway. So I understand there is a need to look at imports and see whether there will be sectoral or regional anomalies. Of course, this will be part of our anti-counterfeit and anti-abuse activity. So I will um, for I can reassure MEPs in this respect. Um, I see several calls to delay or phase out or not use the ETF's allocation. Although I am here representing the Commission, I am responsible for Cbam. So we take note of all the calls to look at the ETS regulation. We will report to our responsible colleagues. But I am here to answer on the cbam file. Um, it, um, it was asked whether it would have been possible to calculate the emissions not on the installation, but on the average of the country. Cbam has to be objective. It's a measure. It's an environmental measure which is applied at the borders. It has to represent exactly the amount of CO2 which is embedded in that specific good, which is crossing the border at that specific time, having a reference to the average of the country would not be objective, would not represent the exact amount of emissions that are linked to the specific goods which is imported, thereby being contrary to the WTO.”
Carbon Border Adjustment Mechanism (CBAM) · VAT harmonisation · EU policy on custom fee on non-EU imports
- “And I can anticipate that not only we will report on it, but also we will have legislative proposals, not next year, but this year on this specific aspect, because we recognize this is urgent, important and needed. So this, you can be sure is going to be done as soon as possible. This sebum is not against competitiveness. Actually, with the existence of the ETS allowances that we are going to be phased out. Sebum is a protection and the expansion to the downstream products is very much asked for by the industry, because they need to be protected on as many possible goods as possible that are covered by the ETS. So all the claims that sebum is against competitiveness and it is costly to calculate the emission and to do the the paperwork, I may simply say ask your stakeholders what their life would be if sebum did not exist. There would have to have the burden of having to pay the allowances on the ETS without having any kind of level playing field with those that are established in third countries. Um, the there was a request to, um, not use default values because they may not be as effective as the actual emission. We have freedom to establish the default values, and we can assure you that default values need to be considered as a very last resort, because sometimes our importers cannot have the values from their producers.”
Extension of the EU Emissions Trading Scheme · Carbon Border Adjustment Mechanism (CBAM) · Carbon leakage support
- “But I can assure you that those default values will be so high that it will be in the interest of the producer in the third countries to come with the actual values instead of those default values. And we are sure this is going to be a great incentive to apply the current, uh, same values. The lack of public consultation. We have been told that this is important for the industry. This has to be done as soon as possible in the short time we were given in order to come up with the proposal for the modifications that we realized were necessary. We did what we could, so we selected the most representative stakeholders while always being in contact with any kind of stakeholders, be it somebody from the public, whoever they could be industries, MEPs, politicians, lobbyists, ever. The people that you see sitting next to me that I would like to thank here are not many, but they have replied to any single question they have received from the abroad, and this has always been the case. This will always be the case. So this if this is not a public consultation, constant and permanent, I don't know what it is, but I can confirm that all the future legislation implementing and delegated acts would be subject to a formal public consultation, as it is required by the Better Regulation Roles.”
Transparency requirements of EU institutions · Transparency requirements for interest groups
- “I understand the WTO concerns in the current situation may be taken with a pinch of salt, but we are still looking at the possibility to have it defended in all possible international fora, especially when this does not undermine the effectiveness of the measure. Um, we are we've been said that this is a bureaucratic beast, that we are cleaning up the mess. I think we actually anticipated what was happening. That's why we have a transitional period. And we established the rules on the basis of what was known at the time. I would like to quote here, MEP confirm this is a smart simplification based on a fact based approach. Indeed, we had a transitional period. We looked at the system in practice because it's very easy to apply rule two to look at rules when they are not being tested in the reality. So in the reality they have been tested and we will apply the necessary modification, so on and so forth as they will become clear. So I would say that we are not cleaning up the mess, we are just adapting our target based on the reality checks. I have to apologize because in my initial presentations I didn't mention the exports, and indeed we are also working on that.”
Carbon Border Adjustment Mechanism (CBAM) · EU policy on custom fee on non-EU imports
- “Because member states do not know how to treat these substitutes of the traditional tobacco products in a way that prevents distortions to the internal market. The proposal will then try to harmonise tax rules to introduce minimum rates for these new tobacco and nicotine products. They will reduce the substitution, remove the market barriers and help fighting health hazards caused also by the fragmentation of Member States rules. Finally, substantial quantities of illicit tobacco products are manufactured within the EU from raw tobacco. Additional measures are required to control the tobacco trade. Controlling the tobacco trade will then help tackle the illicit trade in tobacco, which costs to member states up to 12.5 billion annually. The proposal includes raw tobacco as an excise good, so movements and control provisions would apply to cross-border movements and not taxation. This will permit allowing member state authorities to act quicker on suspicious movement or transactions coming to the impacts of such a directive. We have estimated that these measures will lead to an additional 15 billion being collected across the EU. More importantly, the public health impacts will be considerable in terms of savings compared to the baseline. This taxation measure will contribute to a reduction in tobacco deaths and disability adjusted life years, while also resulting in a reduction in health spending for tobacco related illnesses. So, president, honourable members, colleagues, I hope that I have been of assistance in outlining the proposed changes to the Tobacco Taxation Directive and to the benefits which are anticipated if it is adopted. I would like to thank you for your time and attention today. Thanks.”
Smoking regulation · Electronic cigarettes · Heated tobacco products
- “However, the current minimum tax rates for tobacco products no longer assists in effectively reducing tobacco consumption. While smoking indeed has declined in the EU over the past decade, it remains higher than expected. Europe's beating cancer plan aims to reducing smoking to less than 5% by 2040, and without further intervention through taxation, this goal will not be met. Under the proposal, minimum rates would increase to regain traction and contribute more effectively to the ambition of Europe's beating cancer plan. The minimum rate would, of course, be adjusted according to the economic situation in each member states. In so doing, citizens can be confident that their country tax rules are effective in achieving public health objectives. The adjustment at country level will take into account relative prices in individual member States. This will ensure that the rates act as an effective deterrent against tobacco both now and into the future. Coming to the second aspect of the proposal, new products such as e-cigarettes, heated tobacco products and nicotine pouches, you know, have come to the market recently. They are not harmless, as it has been said. They pose health risks beyond simply cancer. They prolong addiction and act as a gateway to cigarettes and other conventional tobacco products. These products are not in the scope of the directive at the moment, and are not subject to any minimum taxation. Member states have adopted diverging approaches to the taxation of those emerging products. This not only creates a problem for health, it creates a problem for the internal market.”
Smoking regulation · EU measures on lifestyle-related behaviours (smoking, drinking, eating, etc.)
- “Thank you very much, honourable member. You are perfectly confirming my point that in Luxembourg, 97% of tobacco products are destined to the rest of the EU. If this is not a distortion, I don't know what it is. And so, uh, I take due note of the confirmation of this point. I stress that this proposal is subject to unanimity. So adjuvant and, uh, I cannot unfortunately reply for what concerns the use of this revenues as own resource because this falls out of my field of competence. Thanks.”
Own EU resources · Tax Havens · EU competences on taxation
- “Thank you. Chair. And I would like, first of all, to thank you for inviting us to explain, present and clarify possible doubts that you may have on our recently proposed simplification proposal to the Cbam regulation. Before getting into the description of the substance of this new proposal, it is important to recall how Cbam is an environmental instrument. It tackles carbon leakage and it puts a price on the on on imports in terms of emissions. That is done with the target to level the playing field with the producers that are in other countries and that have less stringent climate policies, thereby discouraging moving production in the said countries. Sebum is a key component of the clean industrial deal, and it puts equal treatment at the core of its nature. But it is considering a number of difficult applications that we had to tackle and that we addressed in the in the recent proposal. We want to simplify and to strengthen Cbam ahead of its entry into force of the definitive system on the 1st of January, 2026. And simplification is key because the administrative burden is a component that will be crucial in the success of this measure in its definitive form, a simpler seben would make the life of everyone easier. It would make it easier for importers because they will be able to apply and comply easier with the rules.”
Carbon Border Adjustment Mechanism (CBAM) · Carbon leakage support
- “I thank those honourable members that are supporting our, um, our measure. And I think we have replied also to the claim that cyber attacks competitiveness is a defence of European competitiveness, preserving our climate ambitions. I understand that there may be some confusion with in the industry on what Cbam and ETS are the application, but I would say the if I may humbly say that this the confusion is a bit of political nature because we receive a lot of calls to delay the ETS, thereby delaying cbam. And this is not in our hands. This is going to be a political, if ever, and we hope not. This is going to be a political decision today as we speak. There is no confusion. What has to be applied remains in place. It's only going to be easier. It's not going to be later. It's not going to be different. It's only going to be easier. But the rules will remain the same as they have been known already for some years now. So with this, I think I have replied to all the questions. I would like to thank you for your attention, for the clarity of your interventions, and for the questions that you have asked. I am sure have clarified the position of this committee vis a vis this proposal. Thank you very much.”
Extension of the EU Emissions Trading Scheme · Carbon Border Adjustment Mechanism (CBAM) · Carbon leakage support