Excise duty on tobacco – which products are subject to excise duty and how much is the duty?
Manufacturers and importers of tobacco products pay excise duty on products that are manufactured in Finland or that are sent or transported from other EU countries or non-EU countries and received in Finland. Excise duty must be paid when products are imported to Finland or released for consumption from the duty suspension arrangement.
When a tobacco product is released for consumption in Finland, the product’s retail price must be indicated on the sales package. The price affects the amount of excise duty.
Products subject to excise duty
Products subject to excise duty include
- cigars and cigarillos, even when made partly of materials other than tobacco
- pipe and cigarette tobacco
- cigarette paper
- other products made entirely or partly of tobacco and intended to be smoked, nasally inhaled, sucked or chewed
- fine-cut rolling tobacco
- unprocessed raw tobacco sold in retail directly to consumers
- cigars and cigarillos made partly of materials other than tobacco
- products comparable to cigarettes and pipe and cigarette tobacco made entirely or partly of materials other than tobacco but considered tobacco products by law
- electronic cigarette liquids (with or without nicotine).
- heated tobacco products
How much is the excise duty on tobacco?
The amount of excise duty on tobacco is determined according to the excise duty table for tobacco.
- The amount of excise duty is based on the retail price of the product.
- Cigarettes, cigars, cigarillos, pipe and cigarette tobacco as well fine-cut rolling tobacco are also subject to excise duty payable per unit of product.
- However, the amount of excise duty payable for cigarettes, cigars, cigarillos and fine-cut rolling tobacco is always at least the minimum duty laid down in the excise duty table.
- Electronic cigarette liquid is only subject to the duty payable per unit of product.
- As for other tobacco-containing products and cigarette paper, excise duty is determined based on the retail price.
Example: A company imports 25 kg of pipe tobacco to Finland on 1 January 2022. The retail price is €10,000. Excise duty per unit of product: 25 kg x €83.50/kg = €2.087,50. Excise duty based on the retail price: €10.000 x 0.48 = €4.800. The excise duty in total is €6.887,50.
Terminology related to excise taxation on tobacco
- Retail price: the price at which the company sells the product to customers in Finland, including all taxes and additional charges. The retail price can be freely determined by the company.
- Excise duty per unit: excise duty calculated based on the number of products, kilograms or millilitres.
- Value-based excise duty: excise duty based on the product’s retail price.
- Minimum excise duty: the amount of excise duty payable for cigarettes, cigars, cigarillos and fine-cut rolling tobacco is always at least the minimum duty laid down in the excise duty table.
Products exempt from excise duty
Excise duty does not have to be paid for example on the following products:
- tobacco products of which tobacco products are made
- tobacco products handed over to authorities as samples
- other tobacco-containing products and cigarette paper that an authorised warehouse keeper delivers for consumption in EU countries other than Finland.
Excise duty does not have to be paid when the products
- are moved under the duty suspension arrangement
- are placed under the Customs warehousing or export procedure
- are intended for sale or consumption on board a ship or an aircraft operated professionally in international traffic (delivery to vessel, or victualling)
- are provided for other tax-exempt purposes, such as for diplomats, consuls or international organisations based on a diplomatic relationship (‘sales to diplomats’).
How is the excise duty paid?
You can submit an advance notice and file and pay excise duty in MyTax.
You can also file an excise duty return with a paper form. However, you cannot file on paper unless you have a special reason for doing so. Special reasons include situations where it is not reasonable to expect that the taxpayer could file electronically. An example is a situation where electronic filing is not possible due to technical problems. The special reason does not need to be reported to the Tax Administration.
Electronic cigarette liquids are subject to excise duty
Excise duty must be paid on electronic cigarette liquids. Excise duty is payable on products that are intended for use in electronic cigarettes either as such or mixed with other liquids.
Excise duty is payable on electronic cigarette liquids with and without nicotine, base liquids (such as propylene glycol and vegetable glycerine or combinations of these) and flavour liquids.
Excise duty must be paid on non-nicotine base and flavour liquids if they are intended for use as electronic cigarette liquids.
The amount of excise duty on tobacco is determined according to the excise duty table for tobacco. The excise duty on electronic cigarette liquids is 0.30 cents/millilitre.
An advance notice is required for electronic cigarette liquids and cigarette paper
Starting 1 January 2021, when products subject to national excise duty released for consumption in another EU Member State are imported to Finland, an advance notice must be submitted to the Tax Administration. The obligation related to advance notices concerns, for example, casual import or receipt of cigarette paper and electronic cigarette liquids.
You can file the advance notice and pay the excise duty in MyTax.
Excise duty treatment of differences in inventories (available in Finnish and Swedish, link to Finnish)
Tax Administration decision on taxable values of cigarette products imported contrary to rules or for purposes other than commercial sales (available in Finnish and Swedish, link to Finnish)
Taxable values of tobacco products in non-commercial imports (available in Finnish and Swedish, link to Finnish)