CHANGES IN EXCISE TAX LEGISLATION ON TOBACCO PRODUCTS
Newly introduced excise taxes
New Czech Excise Tax Act amendment introduces as of 1 January 2024 two new excise taxes: excise tax on other tobacco products and excise tax on products related to tobacco products.
Other Tobacco Products: Includes products like snuff and chewing tobacco, which were not previously taxed.
Products Related to Tobacco Products: Covers items such as e-cigarette liquids such as disposable e-cigarettes, refillable cartridges, and base liquids for home mixing whether they contain nicotine or not. This tax also covers nicotine pouches other nicotine products, excluding those used for medical purposes. Similar products that do not contain nicotine (e.g., those containing CBD) are not subject to the excise tax on products related to tobacco products.
The legislation also includes detailed definitions of these other tobacco products and products related to tobacco products, including the definition of electronic cigarettes, the method of calculating the tax, including tax rates, labelling regulations and other provisions related to these products.
Based on the transitional provisions, other tobacco products and products related to tobacco products can be released for free circulation without a tobacco label until April 1, 2024. Furthermore, until 1 October 2024 these products can be distributed without the stamp and will not be considered unstamped.
Reduced Excise tax rate for hookah tobacco
As of 1 March 2024, a reduced excise tax rate applies to hookah tobacco. Moreover, the excise tax will therefore apply to all products intended for use in a hookah, such as mineral/porous stones soaked in glycerin or molasses and various vaporization pastes and creams. However, tobacco that is currently declared as dry hookah tobacco and can also be smoked in other ways, such as hand-rolling into cigarette paper, will continue to be taxed at the standard excise tax rate applicable for smoking tobacco.
Based on the transitional provisions, hookah tobacco can be released for free circulation without a tobacco label until 1 June 2024. Furthermore, until 1 September 2024 these products can be distributed without the stamp and will not be considered unstamped.
Revised Definition of Heated Tobacco Products
The definition of heated tobacco products now includes items containing substances other than tobacco. The tax base will be the total weight of the consumable material.
Gradual Increase in Tax Rates
The legislation outlines a schedule for gradual increases in excise taxes from 2024 to 2027, with initial changes taking effect in 2024 and annual adjustments each January 1st.
