Currently, the tax situation in the EU remains fragmented, as different member states have imposed various tax rates on different products. And while vaping products are regulated under the Tobacco Product Directive (TPD) with regards to the health aspect of things, there is still no EU-wide tax framework in place for them. In 2017, the European Commission (EC) had asked for consultations about a proposed revision of the Tobacco Excise Directive (TED), which would have included such a tax.
In February 2020, a report by the EC suggested that this lack of uniformity is a source of concern from the internal market perspective. “On the market side, developments have accelerated within new e-cigarettes, heated tobacco products and a new generation of modern products are coming into the market (containing nicotine or cannabis),” it read. “The current lack of harmonisation of the tax regulatory framework for these products is also restricting the possibility to monitor their market development and control their movements.”
Meanwhile, TobaccoIntelligence revealed that the EC believes the current Directive 2011/64/EU on the structure and rates of excise duties applied to manufactured tobacco presents “problems” that need to be fixed “quickly”, including how the new rules will govern tobacco-alternative products.
A review of this directive seems top priority for the EC. However, while the Commission’s road map originally expected a decision to be presented by the end of 2021, sources close to the process said that a final proposal may be postponed to the beginning of 2022, due to delays related to internal procedures.