Denmark adopts new tax category for heated tobacco


Denmark’s Ministry of Taxation has issued an Executive Order creating a new excise tax category for heated tobacco. The communiqué announced amendments to Order No. 186 of 26 February 2013 which contains the basic outline of tobacco taxation for the Nordic country.

Heated tobacco is defined in the new order as tobacco “intended for inhalation and which is intended to produce a vapor without the need for a combustion process”.

The new order stipulates a specific tax of DKK 738.5 will apply per kilogram of the heated tobacco mixture.

Prior to the creation of the new classification heated tobacco products were consolidated with various combustible forms of tobacco in a catch-all “other smoking tobacco” category.

Many countries in Europe and elsewhere initially classify heated tobacco products as “other smoking tobacco” when they are first launched in an effort to find the best fit for this innovative tobacco product among the existing categories of traditional smoking and smokeless tobaccos. As consumer acceptance of the product grows, legislators and regulators are inclined to create a new more suitable tax category. Earlier this month, in view of increasing consumption of heated tobacco products in the United Kingdom, HM Revenue & Customs proposed amending the Tobacco Products Duty Act (TPDA) 1979 to include a new tax category designed for these new smokeless products.

In May of this year the European Commission initiated a public consultation on excise duties applied to manufactured tobacco and the possible taxation of novel tobacco products. The consultation will consider the revision of Council Directive 2011/64/EU which lays out the basic framework for taxing tobacco products in the European Union. A key issue for the review is the possible inclusion of heated tobacco in the Directive. The public consultation will conclude on September 8.

With the adoption of the Executive Order, Denmark joins nearly a dozen other EU Member States who have introduced a new tax category without waiting for guidance from the Commission. The Order was issued on June 27 and went into effect on July 1.


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Categorised in: Excise tax, Heated tobacco, novel products

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