IOSS has made cross-border e-commerce into the EU significantly simpler. VAT is collected at the point of sale, parcels clear customs without delays, and consumers receive their orders without unexpected charges at the door. For most products, it works exactly as intended.

But there is a category of goods where IOSS runs into a significant obstacle — and merchants selling everyday products like coffee, chocolate, and tea are often caught completely off guard.

The part of the EU tax map most merchants have never seen

When people talk about excise tax in the EU, the conversation usually involves alcohol, tobacco, or fuel. These are harmonised across all 27 member states under EU-wide directives, and they are well-known exclusions from the IOSS scheme.

What is far less well known is that EU member states levy their own national, non-harmonised excise taxes on goods that are entirely normal in e-commerce: roasted coffee, instant coffee, chocolate bars, cocoa products, confectionery, and in some countries tea. These are not EU-wide rules. They are country-specific national taxes that apply independently, and they apply to imports, including those arriving via international e-commerce.

Which goods are taxed, and where

Coffee

Coffee is subject to a national excise duty in Germany, Belgium, Denmark, Croatia, Greece, and Latvia.

Germany has one of the most clearly structured coffee taxes in Europe. The Kaffeesteuergesetz (Coffee Tax Act) applies to all coffee and goods containing coffee, from the first kilogram, with no threshold. Roasted coffee is taxed at €2.19 per kilogram and instant coffee at €4.78 per kilogram. Distance sellers from other EU member states shipping coffee to German consumers are legally required to appoint a fiscal representative in Germany, register with German customs, and file monthly declarations.

Denmark taxes raw coffee at DKK 6.39 per kilogram under Law LBK no. 1445 of 21 June 2021. Greece maintains a national excise on coffee under Article 53A of Law 2960/2001. Belgium and the other named member states all apply their own domestic rates.

Chocolate and confectionery

Denmark is the most significant market here. The Danish Chocolate Tax Act (Chokoladeafgiftsloven) imposes a duty of DKK 25.97 per kilogram on a broad range of goods: chocolate and chocolate products, cocoa mass, cocoa powder, cocoa butter and cocoa-based preparations, liquorice products, marzipan, nougat, confectionery, boiled sweets, marshmallow products, chewing gum, and candied fruit and peel. This tax applies to e-commerce imports and is assessed when the goods are received from abroad.

Tea

Belgium and Denmark both apply excise taxes to tea products. In Belgium, the obligation is established under the Ministerial Decree of 19 April 2010, which governs the excise regime for non-alcoholic drinks and coffee. The decree covers tea in all consumer forms, teabags, loose-leaf tea, and syrups used for tea preparation, and applies to producers, importers, wholesalers, and retailers alike.

Denmark taxes tea under LBK no. 1445 of 21 June 2021, the same consumption tax law that covers coffee and chocolate. As with coffee and chocolate, distance sellers shipping tea to Danish consumers are subject to the same registration and declaration obligations as domestic producers.

A common question in this category is whether teabags manufactured through industrial or mechanised processes are exempt from excise on the basis that they are an “industrial” rather than a consumer product. They are not. The industrial use exemption that exists in Danish law applies only to goods used as inputs in industrial or technical processes to manufacture other goods that are not themselves taxable. A teabag sold to a consumer is the finished product — it is not an intermediate material used to manufacture something else. The exemption does not apply. No equivalent exemption exists in Belgian law for tea.

Soft drinks and beverages

Finland applies a national excise duty on soft drinks, juices, concentrates, energy gels, sports drinks, and soy and oat beverages. The Netherlands applies a consumption tax on non-alcoholic beverages (€26.13 per hl as of January 2024), with mineral water excluded. Belgium applies a rate of €6.81 per hl on waters with added sugar.

Does processing or raw material status make a difference?

This is a common and understandable question. The answer is: it depends on the country, and in most cases processing does not help.

In Germany, the coffee tax distinguishes between roasted coffee and instant coffee — but both are taxed. The distinction creates a higher rate for more processed products: instant coffee at €4.78/kg versus roasted at €2.19/kg. Green (unroasted) coffee beans may fall outside the scope of the tax, but this is of limited relevance to most e-commerce merchants since virtually no consumer goods use unroasted beans.

In Denmark, the chocolate tax covers not just finished chocolate bars but also the raw intermediary materials: cocoa mass, cocoa powder, and cocoa butter. Processing a cocoa product into a food item does not remove it from the tax scope. It is taxed throughout the value chain. A financial levy also applies when goods contain chocolate or cocoa-derived ingredients subject to the excise — meaning that a product only partially made from chocolate is not automatically excluded.

The same logic applies to tea. The suggestion that teabags are exempt because they are “industrially produced” has no basis in the law of any EU member state that levies a tea excise. The industrial or technical use exemption in Denmark is for goods used as manufacturing inputs to produce non-taxable goods — a teabag sold to a consumer is none of these things. In Belgium, no such exemption category exists for tea at all.

The general principle is this: processing into a consumer product does not exempt a good from national excise duty. If anything, the more processed the form, the higher the rate is likely to be.

The United Kingdom: a notable exception

It is worth noting that the United Kingdom does not levy a national excise duty on coffee, chocolate, or tea. Since Brexit, UK excise taxes remain focused on alcohol, tobacco, and fuel/energy products. Merchants selling these goods to UK consumers face standard import VAT and any applicable customs duties, but not a separate product-specific excise. This makes the UK a simpler destination for these product categories compared to markets such as Germany or Denmark.

The IOSS complication: why these shipments are problematic

IOSS is designed for low-value consignments (up to €150) imported from outside the EU. Under IOSS, the merchant collects VAT at the point of sale, and the parcel clears customs without further VAT collection, giving the consumer a clean delivery experience.

The complication with goods subject to national excise taxes is this: the national excise is not covered by IOSS. It is a separate obligation, collected separately at customs. When a parcel containing German-taxable coffee arrives at German customs, the customs authority will collect the Kaffeesteuer independently of any IOSS arrangement for VAT. The parcel does not flow through cleanly. The consumer is charged for customs processing fee, excise tax and VAT – for the second time – at the door, an experience that undermines the promise made at checkout.

This double VAT scenario generates disputes, chargebacks, and lasting damage to customer trust.

The consequences for merchants include:

• Delivery failures and parcel returns
• Unexpected charges that consumers refuse to pay
• Double VAT collection in some carrier scenarios
• Customs holds that delay delivery and increase costs
• Reputational damage in affected markets

The solution: centralised clearance outside the excise country

The practical answer to this problem is to ensure that the goods are imported into the EU through a country that does not apply a national excise duty on the product in question, rather than having them clear customs directly in the destination country.

This is what is known as centralised clearance. A courier or logistics partner with customs operations in a strategically chosen EU member state clears the shipment there, not in country levying excise tax, but in a country where the coffee or chocolate excise does not apply. The goods enter the EU in that country, VAT is accounted for under IOSS at that point of import, and the parcel then travels onward within the EU as an intra-Community movement, arriving at the consumer without any excise-related customs event.

The practical effect is that:

• The parcel is not held at customs for excise collection
• The consumer receives their order with no unexpected charges
• IOSS functions as intended for the VAT element
• The delivery experience matches what the consumer paid for at checkout

For merchants selling coffee, chocolate, tea, or any other good that attracts a national excise duty in the destination country, selecting a courier with centralised clearance capability is the single most effective operational decision they can make.

EAS works with logistics partners who offer exactly this. If you sell any of the product categories covered in this article and ship to EU markets, contact us to understand whether your current logistics setup is exposing your customers, and your business, to excise-related delivery failures.

Summary: which markets to watch