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Tax Gap of Heated Tobacco Products in Luxembourg
Under the current tax law, heated tobacco is not considered tobacco and therefore not subject to excise taxation (but they are subject to the value-added tax). For comparison, the category “other tobacco products” is subject to a mixed excise tax with a minimum specific tax. Since January 2023, the specific rate is EUR 19.5 per kg and the ad valorem 34.99%. The minimum excise is EUR 59.34 per kg.
Cigarettes are subject to a mixed excise system that includes a specific excise and an ad valorem tax with a minimum specific tax. Since January 1st, 2023, the specific excise is EUR 19.3914 per 1000 cigarettes, and the ad valorem tax is 47.64% of the retail sale price. The minimum excise is EUR 126 per 1000 cigarettes.
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Last updated Sept. 1, 2023