Tobacco

Tobacco Products Tax

Finance Act 2005 is the basis for tax on tobacco products since June 2006. As with other excise tax types, tobacco products tax is paid by both manufacturers and importers.  There are provisions for tax suspension for the products within registered warehouses.

Tobacco products means cigarettes, cigars, fine-cut tobacco for the rolling of cigarettes and other smoking tobacco, except where such products contain no tobacco and are either used exclusively for medical purposes or for products commonly known as herbal cigarettes or herbal smoking products.

Cigarettes are rolls of tobacco capable of being smoked as they are, which are not cigars. They  include rolls of tobacco that are inserted into cigarette paper tubes or wrapped in cigarette paper by simple non-industrial handling. They include products consisting in whole or part of products other than tobacco, otherwise conforming to the above definition.

Where a cigarette is greater than nine centimetres in length, excluding any filter or mouthpiece, it is treated as if any part, in excess of nine centimetres or part thereof, is a separate cigarette.

Cigars

Cigars are

• rolls of tobacco made entirely of natural tobacco.

• rolls of tobacco with an outer wrapper of natural tobacco;
• Rolls of tobacco with a threshed blend filler and an outer wrapper of the normal colour of the cigar cover the product in full, including, where appropriate, the filter.  This does  not include in the case of tipped cigars, the tip and  binder, both of reconstituted tobacco, where the unit weight, excluding the filter or mouthpiece, is not less than 1.2 grams and where the wrapper is fitted in spiral form with an acute angle of at least 30 degrees to be longitudinal to the axis of the cigar;
• rolls of tobacco with a threshed filled blender and an outer wrapper of the normal colour of a cigar of reconstituted tobacco, covering the product in full, including, where appropriate the filter but not, in the case of tipped cigars, the tip , where the unit weight, excluding the filter or mouthpiece, is not less than 2.3 grams and at the circumference  at least one-third of the length is not less than 34 millimetres;
• Products consisting of substances other than tobacco but otherwise conforming to the above criteria, provided they have a wrapper of natural tobacco or a wrapper or binder both of reconstituted tobacco or a wrapper of reconstituted tobacco.

Other Tobaccos

Fine-cut tobacco for the rolling of cigarettes means smoking tobacco in which more than 25 per cent by weight of the tobacco particles have a cut width of less than 1 mm.Other smoking tobacco means tobacco other than fine-cut tobacco for the rolling of cigarettes.

Reconstituted tobacco is tobacco made by agglomerating tobacco dust and  finely divided tobacco derived from tobacco leaves or tobacco refuse that is generally cut up in the form of rectangular sheets or strips.

Smoking tobacco is:

• tobacco which has been cut or otherwise split, twisted or pressed into blocks and which is capable of being smoked without further industrial processing;
• tobacco refuse, which is not put up for retail sale and can be smoked and is not for a cigar or cigarette;
• Products consisting in whole or in part of substances other than tobacco but conforming with the above.

Tax Calculation I

The retail selling price is the price at which cigarettes are sold by retail.  For the purpose of charging excise duty, it is taken to be the price declared in writing to the Commissioners by the manufacturer or importer, at which it is recommended that those cigarettes to be sold by retail.

If, in the Commissioner’s opinion, a price is declared that is lower by an unreasonably large amount than the price at which cigarettes of similar type and character are being sold, the retail price is determined by Revenue Commissioners.

Cigarettes, fine-cut tobacco for rolling cigarettes, cigars, and other smoking tobacco are liable to tobacco products tax at the prevailing rates. Unmanufactured tobacco is controlled by the Revenue but is not subject to the tax.

Tax Calculation II

The manner in which the tax is calculated varies in accordance with the tobacco product.  The Revenue publishes the relevant excise duty rates and provides for them under the legislation.

Tobacco product tax on cigarettes consists of two elements.  The first is a tax calculated per 1000 cigarettes.  The first additional tax is based on the value as a percentage of the retail selling price.

Tax is charged on cigars on the net weight of dutiable products in kilograms per case.  There were rules for rounding up and down. When tobacco is not cased, tobacco product tax on cigars is charged on the total net weight per brand, per warrant computed with certain rounding down in weight.

The tax on roll-your-own and other smoking tobacco is charged on the total net weight per brand, per warrant, computed subject to certain tolerances.

Unlike alcohol products tax, VAT is not charged at the same time as the tax itself.  VAT is payable in the normal way in accordance with the tax returns cycle.

Duty Suspension

Products subject to excise on which the duty has not been paid may only be produced, processed or held in an approved tax warehouse.  Manufacturers or importers who wish to hold, process or store tobacco products under duty suspension must become an authorised warehousekeeper and have their premises approved as a tax warehouse.

They must fulfil tax, obligations of requirements which apply including a duty to the right security and rights of Revenue to undertake inspections, inspect records, et cetera.

A person who wishes to grow tobacco must obtain a licence from the Revenue to do so.  The Revenue  put in place particular controls and conditions on the license.

Unmanufactured tobacco is not subject to tax but must be imported into an authorised warehouse.  Traders must maintain records and accounts of: materials received, used in the manufacture of tobacco products, disposed or otherwise in the manufacture of tobacco products, tobacco refuse and of all tobacco products manufactured.

Offences

A person suspected of an offence of dealing in or with their own stamp tobacco products must provide information to members of the Revenue Officer or members from Garda Siochana.  He may be required to present the tobacco products for examination.

Revenue or Garda officers may search in a bag or receptacle that he or she reasonably believes contain tobacco products that are concerned in the offense.  The person concerned may be required to present the bag or other receptacle for that purpose and to provide access to it.

Revenue or Garda officers may detain a suspected person for as long as necessarily required for the purpose of questioning, examination or search.

Finance Acts 2012-2018

Finance Act 2012 confirms the Budget increases in the rates of Tobacco Products Tax which, when VAT is included, amount to 25 cent on a packet of 20 cigarettes with pro-rata increases on other tobacco products.

Finance Ac 2014 provided a €0.40 increase on a 20-cigarette pack in the most popular price category.  There were proportionate increases in other tobacco products.  There is a €0.20 increase on a 25 g pack of roll-your-own tobacco.

Finance Act 2016 increased the rate of tax tobacco products tax to provide in effect for a 50 percent tax when VAT is included.

Finance Act 2017 increases the rate of tobacco products tax so that when value added tax is included, it comes to 50 percent on a pack of 20 cigarettes in the most popular price category.. There is a further 25-cent increase on a 30-gram pack of roll-your-own tobacco. There are proportionate increases for other  tobacco products.

The Finance Act 2018 confirmed the increases in the rates of Tobacco Products Tax and Minimum Excise Duty for cigarettes. The Tobacco Products Tax rates amount to 50 cent on a pack of 20 cigarettes in the most popular price category with pro-rata increases on other tobacco products, together with an additional 25 cent increase on a 30 gram pack of roll your own tobacco. Minimum Excise Duty now applies at the rate of duty applicable to a packet of 20 cigarettes sold at €11.00.

Finance Acts 2019-2023

Finance Act 2019 confirms that the budget increases the rates of tobacco product taxes. These increases amount to 50 cent on a pack of 20 cigarettes in the most popular price category, on a VAT inclusive basis, with pro-rata increases on other tobacco products.

Finance Act 2020 confirms the Budget increases in the rates of Tobacco Products Tax and Minimum Excise Duty for cigarettes. The Tobacco Products Tax rate increase amounts to 50 cent on a pack of 20 cigarettes in the most popular price category, on a VAT inclusive basis, with pro-rata increases on other tobacco products.

The Minimum Excise Duty rate on cigarettes is also increased and applies at the rate of duty applicable to a packet of 20 cigarettes sold at €11.50.

Finance Act 2021   confirms that the budget increases the rates of tobacco product taxes. The Tobacco Products Tax rate increase amounts to 50 cent on a pack of 20 cigarettes in the most popular price category, on a VAT inclusive basis, with pro-rata increases on other tobacco products.

Finance Act 2022  increases the rates of Tobacco Products Tax. The Tobacco Products Tax rate increase amounts to 50 cents on a pack of 20 cigarettes in the most popular price category, on a VAT-inclusive basis, with pro-rata increases on other tobacco products.

Finance Act 2023 confirms the Budget changes to Schedule 2 of the Finance Act 2005, which provides for increases in the rates of Tobacco Products Tax for cigarettes and other tobacco products. The Tobacco Products Tax rate increase amounts to 75 cent on a pack of 20 cigarettes in the most popular price category, on a VAT inclusive basis, with pro-rata increases on other tobacco products.