Key Points
- Law360 reported on October 26, citing an EU official, that Sweden intends to oppose the proposed tobacco taxation directive at the November 9 ECOFIN meeting.
- A provisional Council agenda dated October 23 lists both tobacco tax directives for discussion on November 9, with the aim of reaching a general approach.
- The reform would raise minimum excise duties on conventional tobacco products and introduce harmonised minimum tax rules for vaping liquids, heated tobacco and nicotine pouches.
- Sweden supports EU tax harmonisation in principle but objects to requirements that would subject nicotine pouches to the same level of taxation as certain smoking tobacco products.
- Traditional Swedish tobacco snus remains outside the proposed directive, while tobacco-free nicotine pouches would be included. Council approval requires unanimity among all 27 EU member states.
2Firsts
October 29, 2026
Sweden is preparing to oppose a European Union proposal to raise minimum tobacco excise duties, Law360 reported on October 26, citing an EU official. A provisional agenda issued by the Council of the EU on October 23 lists the tobacco taxation package for discussion at the November 9 meeting of the Economic and Financial Affairs Council (ECOFIN), where member states will seek to reach a general approach on the proposed legislation. As EU indirect tax legislation requires unanimous Council approval, Swedish opposition could prevent an agreement on the current proposal.
The European Commission proposed an overhaul of tobacco excise rules in July 2025, seeking to increase minimum duties on conventional tobacco products and extend harmonised taxation to vaping liquids, heated tobacco and nicotine pouches. Sweden has repeatedly raised objections, particularly over minimum nicotine pouch duties and the flexibility of member states to differentiate taxes across product categories.
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According to Law360, Sweden intends to oppose the proposed tobacco taxation directive at the November 9 meeting of EU finance ministers. The report cited an EU official. The Swedish government has not issued a separate public statement confirming its specific voting intentions for that meeting.
Sweden's objections had already complicated negotiations.
Bloomberg Tax reported on October 22 that EU member states were approaching an agreement, but Swedish representatives told a meeting of EU ambassadors that their country could not accept the draft then under discussion. Sweden also preferred to keep the tobacco taxation package off the November finance ministers' agenda.
However, the Council General Secretariat's provisional agenda, CM 4725/26, issued on October 23, includes the tobacco taxation package under legislative deliberations for November 9.
The agenda covers two proposed directives addressing excise duty structures and rates, and the general arrangements for excise duty on tobacco and related products. Ministers are scheduled to seek a general approach.
On October 26, the Council's Working Party on Tax Questions (High Level) continued discussions on the Presidency compromise texts. Ireland, which holds the rotating Presidency of the Council, had circulated revised proposals to advance negotiations.
Nicotine Pouch Duties at Centre of Dispute as Sweden Seeks Differentiated Taxation
Sweden outlined its position on the proposed reform in a Ministry of Finance policy memorandum, 2025/26, published on September 15, 2025.
The Swedish government said it generally supported harmonising tobacco and nicotine taxation rules across the EU, but considered it unacceptable to require nicotine pouches to be taxed at the same level as certain smoking tobacco products.
Sweden argued that member states should retain the ability to differentiate taxes according to the relative harmfulness of products.
The European Commission's proposal, published on July 16, 2025, would increase minimum excise duties on cigarettes and other conventional tobacco products while extending common minimum tax requirements to vaping liquids, nicotine pouches and other newer product categories. It would also establish specific categories for heated tobacco and waterpipe tobacco.
Traditional Swedish tobacco snus remains excluded from the proposed EU directive, while tobacco-free nicotine pouches would be brought within the harmonised minimum excise framework.
The distinction is significant for Sweden, which applies separate domestic tax rules to tobacco snus and tobacco-free nicotine pouches. The government wants to retain the flexibility to apply different tax rates to different product categories.
The Commission's original 2025 proposal included EU-wide minimum excise duties for nicotine pouches. Member states have since held several rounds of negotiations over tax levels and transitional arrangements, with the Irish Presidency circulating further compromise texts in October 2026.
EU Tobacco Tax Reform Requires Unanimity From All 27 Member States
The tobacco taxation package consists of two related legislative proposals. One would recast EU rules on the structure and minimum rates of excise duties on tobacco and tobacco-related products. The other would amend Directive (EU) 2020/262, updating the general arrangements for excise duty on those products.
Under Article 113 of the Treaty on the Functioning of the European Union, legislation harmonising indirect taxes requires unanimous approval by the Council following consultation with the European Parliament and the European Economic and Social Committee.
A vote against the package by any member state would therefore prevent the Council from adopting it in its current form.
The European Commission's proposed reforms aim to narrow differences in minimum excise duties across member states, establish common tax rules for newer nicotine products and strengthen controls over the movement of raw tobacco and related products.
The November 9 provisional ECOFIN agenda lists the tobacco taxation package for a possible general approach, although the agenda remains subject to change.
As of October 28, the Council had not announced a final agreement among member states. Sweden's reported intention to oppose the proposal presents a further obstacle to the Irish Presidency's efforts to secure a deal.
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Cover Image Source: Bloomberg Tax
