SME Chamber

The implementation of excise tax on Lubricating Oils

A meeting was held with the Customs Department on an issue raised by our members I relation to excise tax on Lubricating oils. Excise tax on lubricating oils was is fact introduced in 2015. The development that came into force now is the introduction of the identifier mark – the excise duty stamp (boll). This was announced in the Budget read at the end of 2019 for the year 2020 and private operators were informed in writing in July and August of 2020.  It was also published in the Government Gazette in August 2020.

The period from the Budget announcement in 2019 to July 2020 was necessary to establish the design, security features and testing of the excise duty stamp and to come to an agreement with the excise duty stamp supplier with regards to the smooth running of procedures of procuring the excise duty stamps for lubricating oils. 

The aim behind this initiative is to be able to curb on unfair competition that is mainly coming through Sicily and ensure that all products present on the Maltese market are abiding by the same rules. 

All imports (non-EU) or entries into Malta (EU) that came in as of 1st October 2020 must follow the new procedure in the immediate and ensure compliance.

Products already available on the market (pre 1st October 2020) should also have the excise duty stamp affixed as soon as possible. Customs agreed to a transition period that does not go beyond May 2021. Following which enforcement will immediately take place and goods found without the excise duty stamp (even in cases where excise duty has been paid and the excise duty stamp also paid and available but not affixed to the product) will be confiscated and Customs will proceed with their action against the private operator as stipulated by the Excise Duty Act (Chapter 382).

The bank guarantee applies in the case of opting for a Tax Warehouse Keeper status and the amount of the guarantee would be equivalent to the amount of stock of the excisable goods that the tax warehouse can accommodate. Should excise be paid upon entry, in the case of Excise Registered Merchants, a guarantee applies in the form of payment according to the Excise Duty Act,  Article 10C (3) ‘…(a) before dispatch or receipt of the excise goods, he shall guarantee the payment of excise duty, under the conditions fixed by the Commissioner;..’ . 

Importers should seriously consider setting up a tax warehouse. 

What are the advantages of a Tax Warehouse?

  • It is only an area where the excisable goods are kept, the area can be simply marked with tape on the floor so other segregation such as partitioning is not necessary. It can simply be a section in a garage or warehouse.
  • Excise payment would not be required to release the goods, they can be taken to the tax warehouse and payment would be due 30 days after being sold and having left the warehouse.
  • There is no need to affix the excise stamp immediately but up to 5 days following the sale once the sale is done.
  • In case of an accident in the Tax Warehouse and the goods cannot be sold due to damage, spillage, etc… no excise tax would need to be paid.
  • Customs would not have access to the warehouse not their presence be required to access it.
  • Security requirements will ensure that the business is covered from theft.


What are your obligations to keep a Tax Warehouse?

  • Keep record of stocks going in and out of the Tax Warehouse and update customs on a monthly basis.
  • The Tax warehouse is to be kept secure by securing all entrances (including windows), CCTV (not accessible to customs), only accessible by people holding a good conduct. This is all to secure the goods from theft.
  • The bank guarantee that applies is according to the amount of stock the warehouse can take at any given time, this can be further reduced if all security is put in place and it can also be replaced by a private insurance that guarantees that in case of theft and goods going missing the relevant excise would still be paid to the government.

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