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Germany's New Tobacco Tax Laws

Germany's New Tobacco Tax Laws

 

Germany, one of the better countries to vape in, has passed the Tobacco Duty Modernization Act, which will add an additional tax to e-liquids. The tax begins at 0.16 euros per milliliter starting July 1, 2022 and increases until it reaches 0.32 euros per milliliter on January 1, 2026.

The act updates taxes for all forms of nicotine, not just vapes and electronic cigarettes. IQOS is included in its own section under heated tobacco. Shisha and hookah are to be taxed as well, and the tax rates on cigarettes, cigars, and other forms of tobacco are being increased overall. Vapes and e-cigarettes are included and classified as “cigarette substitutes.”

Unfortunately, taxing e-liquid by volume means that 0mg e-liquids or nicotine-free e-liquids, will be taxed as nicotine products as well. While this seems counterintuitive on the surface, the reasoning for this is most likely due to how vape juice is sold in the EU in general after the TPD.

The TPD, or the Tobacco Products Directive, limited the size and strength of tobacco containing e-liquids to a maximum of 10ml of 20mg/ml. E-liquids were then sold in the form of shortfills and nicotine shots. A shortfill is a bottle of large VG, PG, and flavoring is filled that is left slightly empty. The space is for the nicotine shots, which are small amounts of high mg nicotine. Nicotine shots are meant to be mixed with shortfills before vaped. This way of selling vape means that a majority of the vape sold is nicotine free.

For an example of how much this tax will affect vaper’s, let’s look at the price of a 120ml bottle, or a 100ml bottle with two nicotine shots. It could cost about 20€ (24$). In 2022, when the tax begins, the price of the bottle would increase by 19.2€ (22.7$) off the tax alone. By 2026, the tax will increase to 38.4€ ($45.5) - a very steep price increase, and possibly not the only one.

The European Union is also in the process of updating its tobacco laws, known as the Tobacco Excise Directive (TED). Although not all the European countries may agree to a vape tax, it is another very possible tax that could affect German vapers.

Though the Tobacco Duty Modernization Act is an all across the board tax increase for nicotine, it does mean vaping will get affected as well.

References:

Federal Ministry of Finance - Tobacco Duty Modernisation Act adopted

BundesratKOMPAKT - 1006. Sitzung

https://www.bundesrat.de/SharedDocs/drucksachen/2021/0501-0600/507-21.pdf?__blob=publicationFile&v=1





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