The European Union Rejects a Vape Tax…For Now

The European Union will not tax vapor products — at least, not for now. However, the issue will be revisited next year.

The European Commission, which is the executive authority for the 28-member European Union (EU), announced the decision in a Jan. 12 report to the EU’s Council of Finance Ministers. The report followed a review of the 2011 Directive 2011/64/EU (the “tobacco excise directive”), which mandates requirements and guidelines for taxing tobacco products within the EU.

Vapor products like e-cigarettes and e-liquid are not currently included in the tobacco excise directive.

The commission cited limited data on the vaping market as a reason to not propose a “harmonized” taxation scheme for e-cigarettes and other vape products at this time. The commission believes data gathered through reporting requirements in the Tobacco Products Directive (TPD) will allow for a better-informed decision in the future.

European vapers will probably have one fewer advocate at the 2019 talks.

The EU will revisit the taxation idea in 2019, during the next evaluation of the tobacco excise directive. Unfortunately, European vapers will probably have one fewer advocate at the 2019 talks. The United Kingdom is leaving the EU, and even if “Brexit” is not complete before taxation negotiations begin, the U.K. is unlikely to have much sway in those talks.

The commission noted in its report that “opinions on possible health effects of e-cigarettes and, consequently, the appropriate tax treatment largely diverge.” The U.K. is the only current EU member whose government essentially endorses vaping as a harm reduction tool for smokers.

Nine EU member states have some sort of excise tax — sometimes called a sin tax — on vapor products, according to the Vapor Products Tax website. Those countries are Croatia, Finland, Greece, Hungary, Italy, Latvia, Portugal, Romania, and Slovenia. All of those except Finland also have a tax on heat-not-burn (HNB) products. Additionally, Cyprus and Slovakia have no tax on e-liquid or vapes, but do tax HNB products.