Background: In 2014 Lei n.º 82-B/2014, de 31 de dezembro added heated tobacco to the list of products subject to the Special Consumption Tax. The law defines heated tobacco as a “manufactured tobacco product especially prepared to emit a vapor without combustion of the tobacco mixture it contains” (Article 101 Paragraph 9).
Additional details concerning product definitions and the details of the tax applied to heated tobacco in Portugal can be found in Chapter III, Tobacco Tax of the Excise Tax Code (Código dos Impostos Especiais de Consumo – CIEC). Article 101 defines heated tobacco as a tobacco product especially prepared to emit a vapor without combustion of the tobacco mixture. However, for purposes of setting the applicable tax rate Article 104-A groups heated tobacco products with chewing and smoking tobacco.
Excise rates on heated tobacco were amended in January 2017. The specific rate was increased from EUR 75 per kg to EUR 80 while the ad valorem rate was lowered from 20% to 16% of the RSP. The minimum excise tax (MET) for heated tobacco was raised from EUR 135 to EUR 169 per kg of tobacco mixture.
The tax rates were amended again effective 1 January 2018. The ad valorem rate decreased 1.0 p.p. to 15% of the RSP while the specific rate remained EUR 80 per kilogram. The Minimum Excise Tax was raised slightly to EUR 171 per kg of tobacco mixture.