Announcement on the collection of consumption tax on electronic cigarettes

Announcement of the General Administration of Taxation, General Administration of Customs, Ministry of Finance

Number 33 in 2022

In order to improve the consumption tax system, maintain the fairness and unity of the tax system, and better play the role of consumption tax in guiding healthy consumption, the relevant matters concerning the collection of consumption tax on electronic cigarettes are announced as follows:

1. Tax items and objects of taxation

Electronic cigarettes will be included in the scope of consumption tax collection, and electronic cigarettes will be added under the tobacco tax.

Electronic cigarette refers to the electronic transmission system used to produce aerosols for people to smoke, etc., including cigarette bombs, cigarette sets, and electronic cigarette products sold in combination with cigarette bombs and cigarette sets. A cartridge is an electronic cigarette component that contains atomized substances. A smoker is an electronic device that atomizes atomized matter into inhalable aerosols.

Second, regarding taxpayers

Units and individuals that produce (import) and wholesale e-cigarettes within the territory of the People's Republic of China shall be tax payers.

The taxpayer of electronic cigarette production refers to the enterprise that obtains the license of tobacco monopoly production enterprise, and obtains or is authorized to use the registered trademark of others' electronic cigarette products (hereinafter referred to as holding the trademark). Where e-cigarettes are produced by means of OEM processing, the enterprises holding trademarks shall pay consumption tax. Electronic cigarette wholesale taxpayers refer to enterprises that obtain tobacco monopoly wholesale enterprise licenses and operate electronic cigarette wholesale business. Taxpayers in the import of electronic cigarettes refer to units and individuals that import electronic cigarettes.

3. Applicable tax rates

Electronic cigarettes implement AD valorem rate method to calculate tax. The tax rate for the production (import) link is 36%, and that for the wholesale link is 11%.

4. Taxable prices

Taxpayers who produce or wholesale electronic cigarettes shall be taxed according to the sales amount of production and wholesale electronic cigarettes. Taxpayers in the e-cigarette production process who sell e-cigarettes on a commission basis shall calculate tax according to the sales volume of dealers (agents) sold to e-cigarette wholesale enterprises. Taxpayers who import electronic cigarettes shall pay taxes according to the composition tax calculation price.

Taxpayers engaged in e-cigarette processing business in the production of e-cigarettes shall separately account for the sales of e-cigarettes with trademarks and the sales of e-cigarettes for processing; If not accounted separately, consumption tax shall be paid together.

5. Import and export policies

For taxpayers exporting electronic cigarettes, the export tax refund (exemption) policy applies.

Add e-cigarettes to the list of imported commodities not exempt from duty in border exchanges and levy taxes according to regulations.

In addition to the above provisions, the consumption tax on electronic cigarettes carried or delivered by individuals into the country shall be levied in accordance with the relevant provisions of The State Council. Other items of consumption tax on electronic cigarettes shall be implemented in accordance with the Provisional Regulations of the People's Republic of China on Consumption Tax and the Implementation Rules of the Provisional Regulations of the People's Republic of China on Consumption Tax.

This announcement shall take effect as of November 1, 2022.

It is hereby announced.

Source: Ministry of Finance website