Shulou(Shulou.com)11/24 Report--

CTOnews.com October 25 news, the Ministry of Finance, the General Administration of Customs, the State Administration of Taxation issued a notice on the imposition of consumption tax on e-cigarettes. Electronic cigarettes will be included in the scope of consumption tax, and electronic cigarette items will be added under tobacco tax items. E-cigarettes shall be taxed on an ad valorem basis. The tax rate of production (import) is 36%, and that of wholesale is 11%.

Full text of the announcement is attached to CTOnews.com:

In order to improve the consumption tax system, maintain the fairness and unity of the tax system, and give better play to the role of consumption tax in guiding healthy consumption, matters related to the levy of consumption tax on e-cigarettes are announced as follows:

I. on tax items and tax objects

Electronic cigarettes will be included in the scope of consumption tax, and electronic cigarette items will be added under tobacco tax items.

E-cigarette refers to the electronic transmission system used to generate aerosols for human smoking, including cigarette cartridges, cigarette sets and the combination of cigarette cartridges and cigarette sets. Smoke cartridges refer to electronic cigarette components that contain atomized substances. Smoking set refers to an electronic device that atomizes atomized substances into respirable aerosols.

The list of import and export tariff numbers and commodity names of e-cigarettes are shown in the attachment.

II. On taxpayers

The units and individuals that produce (import) and wholesale e-cigarettes within the territory of the people's Republic of China are consumption tax payers.

The taxpayer in the process of e-cigarette production refers to the enterprise that has obtained the license of tobacco monopoly production enterprise and obtained or licensed to use the registered trademark of other people's e-cigarette products (hereinafter referred to as holding trademark). For the production of e-cigarettes by substitute processing, the enterprise holding the trademark shall pay consumption tax. The taxpayer in the e-cigarette wholesale link refers to the enterprise that obtains the license of the tobacco monopoly wholesale enterprise and operates the e-cigarette wholesale business. Taxpayers in the process of importing e-cigarettes refer to the units and individuals that import e-cigarettes.

III. Applicable tax rates

E-cigarettes shall be taxed on an ad valorem basis. The tax rate of production (import) is 36%, and that of wholesale is 11%.

IV. On the taxable price

Taxpayers who produce or wholesale e-cigarettes shall be taxed on the basis of the sales volume of the production or wholesale of e-cigarettes. If taxpayers in the production process of e-cigarettes sell e-cigarettes on a consignment basis, the tax shall be calculated on the basis of the sales volume sold by dealers (agents) to e-cigarette wholesale enterprises. If a taxpayer imports electronic cigarettes, the tax shall be calculated and taxed according to the component taxable price.

If the taxpayer in the e-cigarette production link is engaged in the e-cigarette processing business, the sales of the trademark-held e-cigarette and the processing e-cigarette shall be accounted for separately; if not accounted for separately, the consumption tax shall be paid at the same time.

V. on import and export policies

Tax rebate (exemption) policy shall be applied to taxpayers exporting e-cigarettes.

Add e-cigarettes to the list of non-duty-free imported goods in the Border people's Exchange and levy taxes in accordance with regulations.

In addition to the above provisions, the consumption tax on e-cigarettes carried or mailed into the country by individuals shall be levied in accordance with the relevant provisions of the State Council. Other matters of consumption tax on electronic cigarettes shall be implemented in accordance with the interim regulations of the people's Republic of China on consumption tax and the rules for the implementation of the interim regulations of the people's Republic of China on consumption tax.

This announcement shall enter into force as of November 1, 2022.

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