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France: Tax breaks for rum produced in French overseas territories (EC public consultation)

France: Tax breaks for rum

The European Commission is holding an open public consultation concerning its evaluation of tax breaks for rum produced in French overseas territories. The consultation is intended to explore ways to update the tax regime supporting rum producers in Guadeloupe, French Guiana, Martinique, and Réunion.


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Reduced excise tax (duty) rates have been applied to rum produced in specific French “outermost regions” since 1923. The beneficiaries of the reduced rates are Guadeloupe, French Guiana, Martinique, and Réunion. The reduced rates were renewed in 2014 and will continue to apply until 31 December 2020. France has requested an extension on the period of application of the reduced rates beyond 2020.

As noted in the EC release, the French outermost regions are part of the European Union and operate under its laws and obligations. The EU has recognized that the outermost regions face specific challenges because of their size and remoteness, and allows for a system of reduced rates.

The public consultation is intended to gather information as to whether the reasons for the reduced rate system (which relate to the importance of traditional rum to the economies of the French outermost regions, and the higher costs associated with its production in these regions) still exist, and whether the policy adheres to EU treatment. 

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