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Tax Gap of Heated Tobacco Products in the Netherlands
Heated tobacco products were introduced in the Netherlands in 2017 with the launch of IQOS by Philip Morris International. Heated tobacco is not defined in the tax code and is taxed by default under the category of “smoking tobacco.” A pure specific excise tax system applies to smoking tobacco and, therefore, heated tobacco as well. As of April 2023, the rate is EUR 216.64 per kg of tobacco. The rate is scheduled to increase to EUR 266.98 per kg of tobacco in April 2024.
The Netherlands applies a mixed excise tax system to cigarettes. Since April 1st, 2023, the specific excise tax rate is EUR 271.07 per 1000 cigarettes, the ad valorem excise rate is 5.0% of the retail selling price, and the minimum excise duty is EUR 293.58 per 1000 cigarettes. The rates are scheduled to increase in April 2024 to EUR 317.87 per 1000 cigarettes for the specific tax and EUR 343.92 per 1000 cigarettes for the minimum excise duty (the ad valorem will remain the same).
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Last updated Sept. 1, 2023