What is excise?
Excise is a tax on alcohol, fuel and tobacco products.
Excise is a form of tax
Excise is a duty imposed on domestically manufactured tobacco, fuel and alcohol.
If you make, sell or give away excisable items – alcohol, fuel and tobacco products – in New Zealand, we’ll charge excise duty on those products. You must also licence the areas (Customs-controlled areas) where those products are made and stored.
When excisable items are imported, duty is imposed (excise-equivalent duty) which is equivalent to the excise liability that would apply if the goods were manufactured in New Zealand. Goods for export are not subject to excise.
Note: this is an overview. For full detail, please refer to the legislation.
- Customs and Excise Act 2018
- Customs and Excise Regulations 1996
- Customs (Application for Customs-controlled area Licenses) Rules 1997 (PDF 298 KB)
- Customs (Applications for Customs-controlled area Licences) Rules 2018 (PDF 2.6 MB)
- Customs (Excisable Goods Entry) Rules 1997 (PDF 182 KB)
- Customs Excisable Goods Entry Amendment Rules 2018 (PDF 249 KB)
- Customs (Volume of alcohol) 2013 (PDF 49 KB).
Excise duty is generally payable on anything removed from or consumed in the licensed area, including:
- tasting samples
- promotional give-aways
- free supplies
- bonus supplies.
The Excise and excise-equivalent Duties Table (PDF 93 KB lists those goods that are subject to the excise regime and sets the rates of excise and excise-equivalent duty payable.
You must be licensed to manufacture fuel, and this includes additional manufacture i.e. the blending of duty-paid fuel with other substances, which results in an additional volume of fuel. Regulations prescribe a formula for calculating the volume of new fuel on which excise is levied.
Excise duty exemptions
We won’t charge excise duty on excisable items if they’re:
- exported immediately after they leave the manufacturing area
- moved to an export warehouse that you’ve licensed with us
- removed temporarily for a manufacturing process, and returned to the manufacturing area
- legitimate manufacturing samples, eg for laboratory/quality control testing.
If you’re making alcohol, tobacco or fuel products for your personal use:
- you don’t need to license your manufacturing area
- we won’t charge you excise duty.
If you share those products with anyone else, for free or as a sale, you become liable for excise duty. The criteria is outlined in section 67 of the the Customs and Excise Act 2018.
Buy duty-free alcohol
We won’t charge excise duty on alcohol if you’re going to use it for:
- museums, universities, hospitals and other approved institutions
- approved scientific, educational or other commercial/industrial uses.
You can also use duty-free alcohol to make products that don’t attract excise duty, eg using liqueurs to make liqueur chocolates. This doesn’t apply if you’re making beverages.
You must apply for a permit to buy duty-free alcohol or alcoholic beverages used to make products. If the alcohol has been denatured according to an approved formula, you don’t need a permit.
Duty-free alcohol permits
You must apply in writing at your local Customs office.
Your application should include:
- your organisation’s name
- the address of the premises where you’ll store the alcohol
- the amount and strength of the alcohol you’ll need each year
- what you’ll use the alcohol for
- the name and qualifications of the person using the alcohol.
If the alcohol is for commercial or manufacturing uses, your application must also include:
- evidence for why you can’t use denatured alcohol instead
- statements, where we require, that support your application – these might come from the Ministry of Health, Ministry for Primary Industries or properly-qualified food technologists
- a forecast of how much you’ll be using and when to show that you’re applying for a reasonable quantity.
Your permit will detail its terms and conditions. We may audit permits.