Excise update

You may have seen rumours floating around social media on Monday stating that the European Commission had formally delayed the publication of their report, setting out whether or not they intend to introduce an EU-wide excise regime for vape products.  This is not strictly correct.

As part of a review of the Tobacco Excise Directive (2011/64/EU) the European Commission (DG TAXUD) is currently considering the introduction of an EU-wide excise regime for vape products.  This proposal is based on the fact that some Member States and the Commission are concerned that the adoption of different tax structures and rates for vape products across 28 Member States may affect competition and the functioning of the internal market, and may also encourage informal trade.  If adopted, this is the first time vape products would be taxed at the EU-level.

In February of this year, the European Commission concluded a public consultation on this.  You can read the IBVTA’s response here.

It was expected that the Commission would publish their response to the consultation in the fourth quarter of 2017 and that is still their plan.  The Commission have made clear to the IBVTA that whilst publication of the report will take a little longer that expected, due to internal final validation procedures being slower than expected, they still expect to publish their report in December or early January at the latest.

As we have made clear, the IBVTA is opposed to the introduction of an EU-wide excise regime for vape products or any other form of additional taxation.

Over the last year the IBVTA has been consistently campaigning against these proposals at the EU level.  At times we have been the only dedicated vape industry trade body, in the whole of the EU, in meetings and round table events at the Commission.  In February, we set out some of what we had been doing.

Since then, we have been joined in the fight by our friends in the Irish Vape Vendors Association.

Either on our own or with the IVVA we have met with politicians and officials in the UK and Brussels to ensure that the concerns of the independent vape industry are always on their agenda.  Whilst others have been pushing for the introduction of excise, IBVTA has opposed it.  Where possible, we have also provided opportunities for vapers to meet with officials gathering data for the Commission.  We did this because we felt it was vital that the Commission were aware of the impact such a proposal would have a vapers and smokers.

Based on discussions IBVTA has had with the Commission, we think it is unlikely that they will make any concrete proposal to introduce common EU rules on the taxation of vape products this year because of the still evolving nature of both the industry and the market and the absence of adequate data needed to assess accurately the impact of any such measure.  If this position is confirmed, a report explaining this reasoning will be issued, in principle before the end of this year.  The Commission will also publish the study underpinning their position at the same time.

The next periodic report on the functioning of the tobacco taxation directive is due in 2019 and it is likely that the Commission will keep the taxation of vaping products under review in this context.  In other words, the matter is therefore likely to remain on the tax agenda for the foreseeable future.

As an association, we will continue to work with our members, our friends in the IVVA, and the wider independent vape industry across Europe to constructively fight proposals for an EU-wide excise regime.