How to recover overpaid excise duty in a customs declaration in Poland

Typical reasons for excise duty overpayment in imports of alcohol-based products

Excise duty is a tax imposed on specific goods, such as alcohol, tobacco, and energy products. In the case of alcohol-based products, the amount of excise depends on whether the alcohol is denaturated (chemically treated to make it unfit for human consumption) or not. Denaturated alcohol is usually exempt from excise duty or eventually taxed at a lower rate.

Overpayment of excise duty most frequently occurs when an importer does not provide sufficient documentation to prove that the imported product contains denatured alcohol (e.g.  contamination protocol). In such cases, customs authorities calculate the excise at the full rate applicable to consumable  alcohol (non-denatured) - significantly increasing the tax due.

Imagine a company imports cleaning products or cosmetics that contain industrial alcohol. These products are not intended for human consumption and the alcohol they contain is properly denaturated. However, if the importer fails to present appropriate technical documentation or certificates/protocols confirming the denaturation, the customs office may treat the alcohol as regular one and impose full excise duty.

Such situations can be very costly and affect the financial liquidity of the company, but the good news is that there is a way to recover those funds.

How to Recover Overpaid Excise Duty

Under Polish customs law (in line with EU regulations), importers have three years from the date of acceptance of the original customs declaration to correct it and apply for a refund of overpaid duties.

This is regulated by the Union Customs Code (UCC), specifically Article 173 and Article 116, which governs the reimbursement and remission of duties. In Poland, these provisions are reflected in the Excise Duty Act and Customs Law Act.

In accordance with the mentioned Article 173 of the UCC:

“Upon application by the declarant, within three years of the date of acceptance of the customs declaration, the amendment of the customs declaration may be permitted after release of the goods in order for the declarant to comply with his or her obligations relating to the placing of the goods under the customs procedure concerned.”

To obtain a refund of overpaid excise duty in the case of importing denaturated alcohol (when the relevant documents were not previously available), the first step is to gather the necessary technical documentation that proves the imported goods contained denaturated alcohol (in line with procedures defined in Polish or EU regulations). This could include certificates of denaturation from the manufacturer (e.g. contamination protocol) or product specifications.

Then you must submit a properly prepared correction of customs declaration and attach the relevant documents. This is typically done through the PUESC  - Electronic Tax and Customs Services Platform functioning in Poland.

The correction should indicate clear explanation of the reason for the correction. Besides, the correction must include:

• Reference to the original customs declaration,

• Updated calculation of excise duty,

• All supporting documents confirming the denaturation of alcohol.

Once the correction is accepted, you may file an application for a refund of the overpaid excise duty (also via PUESC). The customs authority will assess the application and decide whether the refund is justified. Due to the fact that the entire procedure is quite complicated, it’s advisable to consult a tax or customs advisor to ensure the refund claim meets all formal requirements.

Don’t Miss the 3-Year Window

One of the most important elements is the time limit. Corrections and refund applications must be submitted within three years of the date the original customs declaration was accepted.

The 3-year time limit gives businesses the opportunity to provide missing or corrected documentation (such as proof of denaturation of alcohol) that was not available or submitted at the time of import. After this deadline, recovery of overpaid excise duty may no longer be possible.

Recovering overpaid excise tax due is a right granted to all importers but one that must be exercised carefully and within the specified timeframe. By understanding the rules and acting quickly, companies can reclaim significant amounts and ensure better compliance in future imports.

Denaturation principles

Please remember, however, that ingredients acceptable for denaturation within the EU may not be the same as in other states. Consequently some cosmetics or cleaning products imported from outside of the EU may be subject to excise duty as if they contained a consumable alcohol. In such cases a reformulation of products may help to save considerable amounts spent on excise duty at importation to the EU.