Alcohol may generally only be produced in Germany in distilleries that are sealed by customs (sealed distilleries). The amount of alcohol produced is measured to determine the tax payable. An exception to this principle are so-called compensation distilleries. Severance distilleries are not sealed and the alcohol tax is estimated as a lump sum according to the type and quantity of raw materials processed.
In order to be allowed to produce alcohol in a severance distillery approved by the main customs office during a certain period, you need a distilling permit. The distillery declaration, with which you apply for the permit, also serves as a tax declaration for the alcohol tax.
The calculation of the tax amount is based on so-called yield rates, which are specified in a list of raw materials. The yield rate indicates how high the assumed amount of alcohol is that can be obtained from 100 kilograms or 100 liters of the raw material used. A reduced tax rate of currently EUR 1,022 per 100 liters of pure alcohol applies to severance distilling, but only within defined quotas.
- You process 100 kilograms of apples. The yield rate for apples is 3.6, so you have to pay tax on a flat rate of 3.6 liters of alcohol. The reduced alcohol tax is 3.6 liters x 1,022 EUR /100 liters = 36.79 EUR.
Even if you do not operate the distillery yourself but, for example, have your self-produced fruit distilled in a severance distillery (substance owner's distillery), you must file a severance declaration and pay alcohol tax if applicable.
The alcohol enters tax-free circulation when it is produced. This means that it may be traded within Germany without tax restrictions.
You can produce alcohol in your severance distillery on behalf of third parties from its raw materials (contract distilling).
Special rules apply if you wish to make use of simplified contract distilling. In this procedure, which is subject to approval, it is possible for you to obtain alcohol "on commission" at the expense of the quota of another distillery than your own, without having to transport the raw materials to the other distillery. So in this case you extract the alcohol in your own distillery.