EU proposes new taxation guidelines for e-cigarettes

Nov.28.2022
EU proposes new taxation guidelines for e-cigarettes
The EU plans to include new tobacco products in the tax category, with a minimum tax on e-liquids based on nicotine concentration.

The London-based news center 2FIRSTS has learned that several European and British media outlets, such as the Financial Times on November 28, reported that the European Union may propose to amend the current 2011 EU tobacco taxation directive.


A London-based journalist from 2FIRSTS News Center conducted interviews with insiders in the European electronic cigarette industry to gather information. The findings are as follows:


The European Commission is working on a proposal to include new tobacco products, such as e-cigarettes and heated tobacco products, in the tax framework for traditional cigarettes.


The European Commission is set to impose a minimum consumption tax on electronic cigarette liquid, with the tax rate based on the nicotine concentration of the liquid.


Each member state can choose to use a pricing-based tax, a quantity-based tax, or a combination of both for taxing. The minimum consumption tax rate depends on the nicotine concentration of cigarettes and must not be lower than:


Nicotine levels below 15mg/ml will be subject to a retail tax of 20% or €0.10/ml, while nicotine levels above 15mg/ml will be subject to a retail tax of 40% or €0.30/ml. The maximum retail price should include all of these taxes. The minimum tax will be adjusted based on the purchasing power parity of each member country, using a specific formula.


The equation RateMS(t) is calculated as two-thirds the rate of the European Union plus one-third of the rate of the European Union multiplied by the previous year's Percentage of the Labor Force in Industry, Manufacturing, and Construction (PLIMS) divided by 100.


RateMS(t) is the adjusted tax rate for a given year (t) in each member country.


RateEU is the standardized EU consumption tax rate.


PLIMS(t-1) refers to the Price Level Indices of each member country in the previous year (t-1), as shown in the chart below.


The EU Consumer Price Index for the year 2021, sourced from the European Commission.


According to these standards, the minimum tax range for nicotine levels of <15mg/ml of e-liquid this year is €0.085/ml (Romania, PLI2021=55.5) and €0.113/ml (Denmark, PLI2021=140.3).


This tax rate will be adjusted on a three-year cycle.


After the release of the draft guidance on taxation, it will be reviewed and revised by the European Council. It can only be approved for implementation after all EU member states have unanimously agreed to it.


The review and modification of the draft will also take into account the opinions or suggestions for amendments from the European Parliament, but they are not binding.


It is reported that the European Commission will propose a revised version of the draft on December 7, 2022.


Taking the example of a 10ml e-liquid product with a nicotine concentration of 20mg/ml on the German online e-cigarette retail platform Innocigs, the current retail price is 8.95€ (including a 20% value-added tax).


Source: innocigs.com


According to a calculation by 2FIRSTS (subtracting existing taxes and adding new taxes, all other conditions remaining the same), the retail price of the product (to EU standards) would be 9.84€ (calculated with a 40% retail tax) or 10.63€ (calculated with a volume tax of 0.3€/ml).


In addition, the European Commission has implemented a ban on flavored heated tobacco products on the 25th of this month in order to curb the increasing demand from young consumers.


To further strengthen coverage of the European electronic cigarette industry news, 2FIRSTS has established a news center in London and will continue to monitor the latest developments in the local electronic cigarette industry, providing exclusive updates. Stay tuned for more information.


Author/Zhu Hongxu


Recommended Reading:


The European Union has banned flavored heated tobacco products.


2FIRSTS establishes London news center.


In a recent report, 2FIRSTS connected with the Medicines and Healthcare products Regulatory Agency (MHRA), which revealed that 25% of electronic cigarettes currently on the market do not comply with regulations.


FIRSTS connects with UKVIA: Suggests UK Government Raise E-cigarette Capacity Limit to 5ml.


Reference:


Law to modernize tobacco tax law (Tobacco Tax Modernization Law - TabStMoG)


The taxes levied on tobacco products, commonly referred to as excise duties.



Disclaimer

This article is provided solely for professional research, industry discussion, and informational purposes. Any references to brands, companies, products, technologies, or policies are made for factual reporting and analytical purposes only, and do not constitute endorsement, recommendation, promotion, or advertising by 2Firsts.

Nicotine-containing products, including but not limited to cigarettes, e-cigarettes, heated tobacco products, and nicotine pouches, carry significant health risks. Readers are responsible for complying with all applicable laws and regulations in their respective jurisdictions, including age restrictions and access limitations.

The information contained in this article should not be regarded as investment, legal, medical, regulatory, or commercial advice. While 2Firsts strives to ensure the accuracy and reliability of its content, it does not assume liability for any direct or indirect loss arising from errors, omissions, inaccuracies, or reliance on the information contained herein.

This article is not intended for individuals below the legal age for accessing tobacco or nicotine-related information in their jurisdiction.

 

Copyright Notice

This article is either original content produced by 2Firsts or content reproduced, translated, summarized, or adapted from third-party sources with attribution where applicable. The intellectual property rights of the original content remain with 2Firsts or the respective original rights holders.

No individual or organization may copy, reproduce, distribute, republish, modify, translate, or otherwise use this content without prior authorization. Any unauthorized use may result in legal action.

For copyright-related inquiries, corrections, or removal requests, please contact: info@2firsts.com.

 

AI-Assisted Translation and Editing Notice

Portions of this article may have been translated, edited, or reviewed with the assistance of artificial intelligence tools to improve efficiency and readability. Due to the limitations of AI-assisted translation and editing, discrepancies, omissions, or inaccuracies may exist when compared with the original source.

Where applicable, readers are advised to refer to the original source for the most complete and accurate information. If you identify any errors or believe that any content infringes upon your rights, please contact us at info@2firsts.com, and we will review and address the matter promptly.

BofA Upgrades Imperial Brands, Says Market Overreacted to Australia Slump
BofA Upgrades Imperial Brands, Says Market Overreacted to Australia Slump
Bank of America upgraded Imperial Brands to “buy” from “neutral,” saying investors have overreacted to the tobacco group’s Australian business downturn and that the share-price pullback has created a more attractive entry point.
Jul.16
UK Proposes Stricter Vape Packaging Rules as Retailers Warn of £330 Million Impact
UK Proposes Stricter Vape Packaging Rules as Retailers Warn of £330 Million Impact
The UK government has launched a nationwide consultation on vape packaging, appearance and retail displays, proposing tighter rules to reduce youth appeal while industry groups warn of significant compliance costs.
Innovation
Jul.20
Altria Smokeable Profit Rises 2.4% as Marlboro Share Falls and U.S. Discounts Gain
Altria Smokeable Profit Rises 2.4% as Marlboro Share Falls and U.S. Discounts Gain
Altria’s second-quarter results show a U.S. nicotine market splitting across price, product and regulation. Smokeable profit rose 2.4% as Marlboro pricing offset lower volumes, while discount brand Basic gained share among value-conscious smokers. In oral nicotine, on! PLUS expanded distribution but faced intensifying competition from ZYN and Velo. NJOY remained off the market as patent and regulatory hurdles delayed its return. The broader lesson: U.S. growth increasingly depends on price-tier strategy, retail execution, authorisation and enforcement readiness across the industry.
Special Report
Jul.31
Product | JT Refreshes Ploom CUBE Design and Expands Japan Retail Distribution, Targeting Younger Men and Female Users
Product | JT Refreshes Ploom CUBE Design and Expands Japan Retail Distribution, Targeting Younger Men and Female Users
Japan Tobacco (JT) launched a refreshed Ploom CUBE design in Japan on September 8, 2026, with broader convenience-store and tobacco-retail distribution planned from October 13. The updated device retains the existing Rounded Cube form and heating platform while replacing four previous body colors with Pebble White and Cobalt Black. JT is also introducing new Front Panels and Fabric Back Covers, although the new accessories are not compatible with the previous Ploom CUBE design. The company says the update is intended to broaden appeal among younger male and female users.
Sep.09
Major U.S.  Vape Distributor Demand Vape Pays at Least $300,000 for White House Lobbying Amid Enforcement Pressure
Major U.S. Vape Distributor Demand Vape Pays at Least $300,000 for White House Lobbying Amid Enforcement Pressure
New York vape distributor Ecto World, which operates as Demand Vape, hired political consultant Roger Stone to lobby the Executive Office of the President on regulation of vaping and related products while facing state enforcement and multiple lawsuits. Public lobbying disclosures show that Ecto World paid at least $300,000 for the work through June 30, 2026. Separately, New York State announced in March that more than 28,500 pounds of vaping products tied to the company had been seized, while New York City and the state have pursued legal or enforcement actions. Public records do not show that the lobbying directly changed any specific regulatory or enforcement outcome.
Sep.08
Nasdaq-Listed Vape Company iSpire Technology Restructures Leadership as Tuanfang Liu Becomes Sole CEO, BTIG Initiates Coverage on ODM Growth Opportunity
Nasdaq-Listed Vape Company iSpire Technology Restructures Leadership as Tuanfang Liu Becomes Sole CEO, BTIG Initiates Coverage on ODM Growth Opportunity
Nasdaq-listed vape company iSpire Technology has restructured its leadership team, with Tuanfang Liu becoming the company’s sole chief executive officer (CEO) and Michael Wang appointed CEO of Aspire North America. The move ends iSpire’s previous co-CEO structure and creates clearer responsibilities between group strategy and regional execution. Separately, BTIG initiated coverage on iSpire Technology with a Buy rating and a $3.50 price target, identifying ODM growth opportunities as a key investment factor.
Jul.27