Russia introduces new taxes on vapor products

Vapor products have been added to the list of excisable products contained in Article 181, paragraph 1 of the Tax Code of the Russian Federation. The amendments to Parts 1 and 2 of the Tax Code were approved on November 30, 2016.

The new tax categories added were 1) electronic nicotine delivery systems, 2) liquids for electronic nicotine delivery systems and 3) tobacco intended for consumption by heating.

Electronic nicotine delivery systems (ENDS) are defined as “disposable electronic devices that produce user-inhalable aerosol, vapor or smoke by heating the liquid.” Medical devices registered according to the legislation of the Russian Federation are excluded. Each ENDS will be taxed at RUB 40 per unit.

Liquid for electronic nicotine delivery systems is any liquid with nicotine concentrations of at least 0.1 mg per ml intended for use with electronic nicotine delivery systems. The applicable tax is 10 rubles per milliliter.

Tobacco products intended for consumption by heating are subject to a tax of RUB 4800 per kilogram.

The new taxes went into effect on January 1, 2017.