German Customs Notifies Electronic Cigarettes Should Be Taxed
The German Customs has notified the local electronic cigarette association and economic operators that tobacco alternatives products, also known as e-cigarettes, which have been listed before July 1, 2022, should be re-taxed, and that all e-cigarettes held within the taxation area with invalid tax numbers, will be taxed according to the e-cigarette additional tax rate from February 13, 2023 onwards. Product owners must act quickly to comply, return used goods to a tax warehouse, have tax stamps affixed (by manufacturers, importers, or purchasers for commercial purposes), and fulfill retrospective taxation obligations. E-cigarette traders are advised to improve their retail packaging and use approved tax stamps for subsequent taxation while the tax warehouse owners must already have tax numbers to undertake all tax after-tax obligations.
On December 28, 2022, German customs sent a letter to the local Electronic Cigarette Association and economic operators notifying them that tobacco alternative products (i.e. “e-cigarettes”) that were listed before July 1, 2022, should be taxed again. They require e-cigarettes that have not fulfilled their tax obligations before July 1, 2022, returned to a tax warehouse where people with the right to obtain a tax stamp (manufacturers, importers, or purchasers for commercial purposes) can affix the tax stamp and fulfill their retrospective taxation obligations.
This article will introduce the obligations that product owners involved in the notice letter should fulfill as soon as possible.
“Used Goods” Taxation
- According to section 1b of the Tobacco Tax Law (TabStG), e-cigarettes should comply with the tax payment rules stipulated in TabStG and its implementation regulations;
- From February 13, 2023, e-cigarettes that were already on the market before July 1, 2022 (hereinafter referred to as “used goods”), and all e-cigarettes with invalid tax numbers held in the taxation area, will be taxed according to the e-cigarette additional tax rate.
Tax Payment Process
- Traders agree that the tax warehouse owners they choose have the right to obtain tax stamps for used goods that will be taxed again. The tax warehouse owners must already have a trade tax number and undertake all rights and obligations after tax;
- Used goods must be returned to the tax warehouse before February 12, 2023, and must be entered into the tax warehouse owner’s record book (tax warehouse book, and tax number book) with the notation “used goods after tax.”
Stamp Posting Requirements
- If necessary, the retail packaging needs to be improved in the tax warehouse first. Only when the retail packaging meets the requirements of TabStG can a tax number be used for subsequent taxation;
- Retail packaging with multiple openings may not be used. If the retail packaging has a second opening, the retail packaging must be repaired sufficiently at that opening. The repair must be done with large-area, unremovable adhesive or fixed by connecting it with unremovable safety tape;
- A tax stamp must be affixed to the unique opening of the retail packaging. Invalid tax labels are to be removed without any obvious damage to the tax stamp or packaging.
Tax Number Acquisition
A. The tax warehouse owner obtains a tax number through the “No. 1619 e-cigarette tax declaration form,” which is specifically for manually filling out tax signatures for post-tax e-cigarettes.
B. The filled out application form should be sent to the following address or email address in the form of postal or electronic scans:
- Address: Hauptzollamt Bielefeld, Sachgebiet B, Arbeitsgebiet Tabaksteuer und Steuerzeichenstelle, Postfach 32 40, 32232 Bünde.
- Email address: [email protected]
C. If it is impossible to tax again, individual traders must dispose of used goods by February 13, 2023.
E-cigarette tax rate
According to TabStG, the e-cigarette tax rate is executed at the following time points:
- From July 1, 2022, to December 31, 2023, 0.16 euros per milliliter;
- From January 1, 2024, to December 31, 2024, 0.20 euros per milliliter;
- From January 1, 2025, to December 31, 2025, 0.26 euros per milliliter;
- From January 1, 2026, 0.32 euros per milliliter.
Recently, many mainstream e-cigarette import markets have strengthened their supervision of circulation channels to protect normal market order. It is suggested that relevant companies pay attention to the compliance export requirements of target markets.
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