
Editor's note: Germany's transitional period for taxing e-cigarettes will end on February 12, 2023. As the transitional period comes to a close, law enforcement agencies have started investigating tax issues in e-cigarette retail shops, signaling the advent of a period of strict regulation in Germany.
Recently, the main customs office in Muenster, Germany, conducted raids on 15 shops selling electronic cigarettes, vape devices, hookah products, and tobacco within the state of North Rhine-Westphalia. More than two-thirds of the targeted shops were found to be selling illegal electronic cigarettes, including 370 liters of untaxed e-liquid. According to estimates by the customs office, this amounts to a tax loss of 60,000 euros.
Reportedly, Germany decided to impose a tax on e-cigarette liquids on August 10, 2021 with a transition period until June 30, 2022. To allow distributors to handle their inventory, the transition period was extended until February 12, 2023. Currently, the transition period has ended and Germany is now enforcing laws on tax evasion related to e-cigarettes.
It is reported that Germany is one of the few countries in Europe to impose taxes on electronic cigarettes, with a tax rate of €0.16 per milliliter of e-liquid. It is expected that by 2024, the tax rate will increase to €0.2, then €0.26 by 2025, and reach €0.32 by 2026. This could result in a nearly 40% increase in the retail price of electronic cigarettes.
For instance, a 10-milliliter bottle of e-cigarette liquid currently costs around 10 euros (including value-added tax). Once tobacco tax is added, the price will increase by 1.6 euros. With the addition of value-added tax, the total increase will be 1.9 euros.
Exclusive: Germany's E-cigarette Taxation Plan Estimated by 2FIRSTS
Reference:
The grace period for e-cigarette retailers regarding the 'liquid tax' has ended
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