Background: Italy’s current tax on e-cigarettes entered into effect on 24 December 2014 through Legislative Decree No. 188. L.D. 188 replaced an ad valorem tax of 58.5% on the retail price of e-cigarettes introduced in 2013 by L.D. 76 which was quickly suspended by administrative tribunal before it could be applied and subsequently invalidated by the Constitutional Court.
The rate of excise tax on the liquid used in electronic cigarettes was set at €0.37344 per ml based on a complex formula devised by the Director of Customs & Monopolies. The excise tax yield of 1000 tobacco cigarettes sold at the Weighted Average Price (“WAP“) is a key variable in the formula. In Italy, the WAP is recalculated once a year to assess compliance with the European Union’s excise directive for manufactured tobacco Council Directive 2011/64/EU. As a result of that annual recalculation, the WAP was increased in January 2016; hence the excise tax on the liquid used in electronic cigarettes was raised to €0.385 per ml and subsequently to €0.3976 per ml in 2018.
Additional details on the registration of liquid inhalation products and the assessment and payment of taxes are available (in Italian) in Provisions on Taxation of Tobacco Products and Their Substitutes, as well as on Matches, Legislative Decree December 15, 2014, no. 188 (Art. 13 of Law 23/2014) – Outcome of Advice to the Government.