Background: 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.
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.
Adjustment of tax rates
The new taxes went into effect on January 1, 2017. The legislation provides a mechanism for adjusting the rates annually in January. The tax per ENDS unit was introduced at 40 rubles. The current rate of RUB 48 per unit has been in place since 1 January 2019 and will rise to RUB 50 per device in 2020 and RUB 52 on 1 January 2021.
The original tax placed on liquid intended for use with ENDS was RUB 10 per ml. Since 1 January 2019 the rate has been RUB 12 per milliliter. It is scheduled to rise to 13 rubles in January 2020 and to 14 rubles per ml in 2021.