Tax Across the EU Bloc: A Bottle of Juice up by 2€

Industry InsightRegulations
2FIRSTS London News Center has learned from informed sources that the EC may write a draft to promote the current tobacco excise tax reform to include e-cigarettes in the scope of taxation, given the strong appeal of e-cigarette-related products to youth.

Ellesmere Zhu, London


2FIRSTS London News Center has learned that some European and British media (e.g., Financial Times, Nov. 28) have reported that the European Union may propose changes to the current "2011 EU tobacco taxation directive".


2FIRSTS London news center correspondent spoke to a European e-cigarette industry insider and compiled the following information.


The EC is drafting proposals to include new tobacco products (including e-cigarettes, heated tobacco, etc.) in the taxation category of cigarettes.


The European Commission plans to impose a minimum excise tax on e-liquid, the tax rate depends on the nicotine concentration of the liquid.


Member countries can choose ad valorem taxation, quantitative taxation, or a combination of both. The minimum excise tax rate depends on the nicotine concentration of e-liquid, and must not be less than:


  • (nicotine <15mg/ml): 20% retail price tax, or 0.10€/ml
  • (nicotine >15mg/ml): 40% of the retail price, or 0.30€/ml


The maximum retail price should be able to cover all the above taxes. The minimum tax is adjusted according to the purchasing power parity (PPP) of each Member State, with the following detailed adjustment formula.

Tax Across the EU Bloc: A Bottle of Juice up by 2€


RateMS(t) is the adjusted tax rate of each member state for a certain year (t);
RateEU is the EU standard consumption tax rate;
PLIMS(t-1) is the Price Level Indices of each member state for the previous year (t-1), see the graph below.

Tax Across the EU Bloc: A Bottle of Juice up by 2€

Source: European Commission


At this rate, the minimum tax range for nicotine <15mg/ml tobacco oil this year is 0.085€/ml (Romania, PLI2021=55.5) and 0.113€/ml (Denmark, PLI2021=140.3)


The tax rates will be adjusted on a three-year basis.


The draft tax guidance will be published and will be reviewed and amended by the Council of the European Union and approved for implementation only after unanimous agreement by the EU member states.

The review and modification of the draft will also refer to the European Parliament's opinion or modification proposal, but is not binding.


It is reported that the European Commission will propose amendments to the draft on December 7, 2022.


Take a certain 20mg/ml 10ml bottle of vape liquid product in the German e-cigarette online sales platform Innocigs for example, the current retail price is 8.95€ (including 20% VAT).


Tax Across the EU Bloc: A Bottle of Juice up by 2€

As calculated by 2FIRSTS (minused by existing taxes, added by new taxes, remaining conditions unchanged), the (EU standard) retail price of the product is 9.84€ (based on 40% retail tax) or 10.63€ (based on 0.3€/ml ad valorem tax).


In addition, the EC imposed a ban on flavored heated tobacco products on the 25th of this month to curb the surge in demand from young consumers.


To further strengthen the coverage of the European e-cigarette industry news, 2FIRSTS has set up a news center in London and will continue to follow the latest developments in the local e-cigarette industry and push out first-hand information. Stay tuned.



Gesetz zur Modernisierung des Tabaksteuerrechts (Tabaksteuer - modernisierungsgesetz - TabStMoG)

Excise Duties on Tobacco


Related news:

EU to Propose New Excise Tax on E-Liquids


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