Sparkling Wine Taxes in Europe

December 28, 2020

This week, people around the world will celebrate New Year’s Eve, with many opening a bottle of sparkling wine to wish farewell to—a rather consequential—2020 and offer a warm welcome to the—by many of us, long-awaited—new year 2021.

If you have ever wondered about the tax consequences of opening that bottle of sparkling wine—yes, there is a tax angle to everything—today’s map will provide you with some insights. Excise duties on sparkling wine differ significantly across Europe, ranging from no excise tax in some countries to over €6 (US $7) per bottle in Ireland.

New Year's Eve taxes, Sparkling wine taxes in Europe

Among European Union countries, you’ll find the highest excise taxes on sparkling wine in Ireland, at €6.37 ($7.14) per standard sized wine bottle (750 ml or 20 oz). The United Kingdom and Finland are next, at €3.21 ($3.60) and €2.98 ($3.33), respectively.

Of the countries levying a sparkling wine tax, the lowest rates can be found in France (€0.07/$0.08), Romania (€0.08/$0.09), and Malta (€0.15/$0.17). Austria, Bulgaria, Croatia, Cyprus, Greece, Italy, Luxembourg, Portugal, Slovenia, and Spain all don’t levy excise duties on sparkling wine.

All European countries also levy a value-added tax (VAT) on sparkling wine. The amounts shown on the map relate only to excise taxes and do not include the VAT, which is charged on the sales value of the sparkling wine bottle.

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A Value-Added Tax (VAT) is a consumption tax assessed on the value added in each production stage of a good or service. Every business along the value chain receives a tax credit for the VAT already paid. The end consumer does not, making it a tax on final consumption.

An excise tax is a tax imposed on a specific good or activity. Excise taxes are commonly levied on cigarettes, alcoholic beverages, soda, gasoline, insurance premiums, amusement activities, and betting, and make up a relatively small and volatile portion of state and local tax collections.