Italy will reduce the tax on e-liquids on April 1

Italy is adjusting its tax on e-liquids for the fourth time in four years, and this time the changes will favor vaping consumers. The new tariffs will come into effect on April 1, after final adoption by the Senate at the end of February.

The country has brought taxes on e-liquids back to the levels set in 2021 by repealing the planned increase which took effect in January 2022. The tax rate on e-liquids containing nicotine will increase from €0.175 (equivalent American: $0.19) per milliliter to €0.13, and the e-liquid tax without nicotine will increase from €0.13/mL to €0.08.

There is constant uncertainty over vaping tax rates in Italy, with parliament changing them seemingly at random in almost every new annual budget. Political leaders seem to have no sympathy for small businesses trying to plan for the future or for consumers who simply want attractive products that help them avoid smoking.

Italian vapers have been on a price rollercoaster since 2014, when parliament wiped out 75% of the country’s burgeoning legal vape industry with a tax that made vaping as expensive as cigarettes. The €0.40/mL tax introduced in 2014, the highest in the European Union, nearly doubled the price of e-liquid and forced many vapers to find products on the black market or from illegal cross-border sellers. Some, of course, returned to cigarettes.

Parliament also banned online sales in Italy. In less than three years, the once mighty Italian vape industry has shrunk from 4,000 companies (in a country of 61 million people!) to just 1,000.

Finally, in 2019, pressure from vapers and the surviving vape industry persuaded lawmakers to correct their mistake and reduce the tax by 80%, to a much more reasonable price of €0.08 per ml for vapers. e-liquids containing nicotine and €0.04 for those without nicotine. e-juice.

But last year politicians raised the tax again and set automatic increases for 2022 and 2023 that would have ultimately raised the rate of the tax to around €0.21/mL for e-liquids containing nicotine and €0.17 for e-liquids without nicotine. (Parliament then temporarily reduced tax rates to 2019 levels due to COVID, but that relief expired at the end of 2021.)

In addition to e-liquid tax, consumers also pay a 22% sales tax, called Value Added Tax (VAT), on all vaping products (and most other products). At the current tax rate, a 10ml bottle of e-liquid (the maximum legal size in all EU countries) that starts at €5.00 ends up costing the vaper over €8.00. Nearly 40% of the cost to the consumer is taxes.

Aron M. Newman