Austria

Background: Austria has created a new excise tax category for heated tobacco products. A specific tax will be applied to the weight of tobacco expressed in kilograms.

In discussions leading up to the amendment to the Tobacco Tax Act it was acknowledged that unlike cigarettes or cigars or other tobacco products, heated tobacco does not burn but heats up to generate an aerosol that is inhaled. While the new product is currently available in nearly two dozen EU countries its market share in Austria is low and taxation levels would be below those on cigarettes.

The initial rate will be set at EUR 110 per kilo, which is the current minimum level of excise tax applied to fine cut tobacco.

The tax and the new category went into effect on 1 April 2019. The rate was subsequently increased to EUR 123 per kilogram of tobacco.