As a rule, alcohol may only be produced in Germany in distilleries that are sealed by customs (capping distilleries). An exception to this principle are severance distilleries.
These distilleries are not sealed and the alcohol tax is estimated at a flat rate according to the type and quantity of raw materials processed. The permit entitles you to operate such a distillery. In your severance distillery, you may produce up to 300 liters of pure alcohol (annual quota) per calendar year.
Before granting a permit, the tax authorities generally check whether certain requirements are met with regard to your tax reliability, your bookkeeping, and your business facilities. You must also prove that you have an economic need, for example, because you grow a lot of fruit as an agricultural business.
The permit is tied to your person and may be temporary. Independently of the operating permit, you must also have each individual burning process approved and submit a so-called severance declaration. The information in the severance declaration is used to determine the lump-sum amount of alcohol you obtain for each distilling operation. Your annual quota will be debited accordingly.
If you do not own your own bottling plant, you can process your self-produced raw materials fruit (including fruit must and fruit pomace), berries, wine (including wine yeast and wine pomace), roots, Jerusalem artichokes or the respective residues thereof into alcohol as a so-called substance owner in a bottling plant approved by the customs administration or have them processed by the owner of the respective bottling plant (substance owner distilling).
You do not need a formal permit to act as a substance owner. However, you must also register each individual distillation process with the main customs office. To do this, you submit a "substance owner's severance declaration". The declaration also serves as a tax return for the alcohol tax. As a substance owner, you have a quota of up to 50 liters of pure alcohol per calendar year.