What are tobacco products?
Tobacco products are products for the purposes of smoking, chewing, sucking or sniffing, inasmuch as they are, even partly, made of tobacco.
For the purposes of excise duty, products consisting in whole or in part of substances other than tobacco but otherwise conforming with the definition of cigarettes or smoking tobacco (e.g. cigarettes made from tea leaves, a herbal mixture used in a water pipe) will be treated as cigarettes or smoking tobacco.
Products that are used in a similar way or for a similar purpose to a tobacco product, i.e. products that imitate the consumption of tobacco products or products used to replace tobacco products (alternative tobacco products) are also treated as tobacco products for tax purposes.
Smokeless tobacco product is a tobacco product not involving a combustion process, including chewing tobacco, nasal tobacco and tobacco for oral use.
Trading in smokeless tobacco products and the manufacture, possessing, storage or distribution of smokeless tobacco products for commercial purposes or in commercial quantities is prohibited.
As an exception, storage of smokeless tobacco products is permitted on board a ship operated for commercial purposes which leaves to or from a country where the sale of smokeless tobacco products stored on the ship is permitted.
Smokeless tobacco products prohibited for handling are not products subject to excise duty.
Tobacco products, which contain tobacco or another plant and are intended for consumption by heating, are subject to the provisions of the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act concerning smoking tobacco. If the products can also be used as cigarettes, i.e. consumed by combustion, then the provisions of the Act concerning cigarettes apply to the product. (§ 16 (42) of the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act)
For the purposes of the Tobacco Act, a product containing tobacco and consumed by heating is a novel tobacco product. Requirements established for novel smokeless tobacco products are applied on novel smokeless tobacco products. However, the requirements laid down in the Tobacco Act for herbal products for smoking are applicable to products containing plants other than tobacco, which are consumed by heating. (§ 3 (5) and § 31 of the Tobacco Act)
Beginning from 2022, a new section for declaring tobacco products intended for inhalation without combustion was added to the Combined Nomenclature (CN). Products containing tobacco and consumed by heating are declared under code 2404 11 00 and products intended for consumption by heating but containing tobacco substitutes (plants other than tobacco) are declared under code 2404 19 10.
As of 2022, a new tobacco revenue stamp type “L” was added to the list of types of revenue stamps for tobacco products, the type is to be used for stamping smoking tobacco containing other plants or tobacco consumed by heating.
An alternative tobacco product is a product with or without nicotine content, which is not a classic tobacco product and is used or intended to be used in a similar way to a tobacco product, i.e. an alternative product used as a tobacco product intended to replace a tobacco product.
Examples of alternative tobacco products include:
- tobacco liquid, including liquid for electronic cigarette, which is flavoured or not flavoured, with or without nicotine yield and which is used in a device intended for consumption of an alternative tobacco product or addition to tobacco or its substitute;
- solid tobacco substitute, which is with or without nicotine yield, flavoured or not flavoured and which is intended for use similarly or for similar purposes with tobacco products;
- other alternative tobacco product.
Alternative tobacco products are classified as follows:
|tobacco liquid with nicotine||2404 12 00|
|tobacco liquid without nicotine||2404 19 90|
|other alternative tobacco product
(e.g. gel product)
|2404 91 90|
|solid tobacco substitute||2404 91 90|
|device filled with tobacco liquid||8543 40 00|
Equipment and accessories intended for their use are not considered as alternative tobacco products. When a liquid-filled device is imported or brought from another Member State, excise duty is levied on the quantity of liquid contained in the device and not on the device itself.
A liquid suitable for consumption as a tobacco product or for the manufacture of tobacco liquid is not subject to excise duty if it is used for manufacturing a product other than an alternative tobacco product.
Storage of products suitable for use as alternative tobacco products, including their components, outside an excise warehouse is permitted if the products:
- are subject to customs supervision;
- are subject to excise duty;
- are not subject to excise duty because the products are intended to be used for purposes other than tobacco products and this is confirmed by the way of packaging the products, information on the presentation for sale and other data related to the handling of the product;
- are stored in the place of business of a person who uses these for manufacturing a product other than alternative tobacco products;
- are in the possession of a natural person for non-commercial purposes;
- are exempt from excise duty.
An alternative tobacco product that is shipped from another Member State to Estonia is considered to be a product released for consumption in another Member State, regardless of whether the product has been subject to excise duty in the other Member State or not.
More information: Trade with other countries – movement of tobacco products released for consumption for commercial purposes.
Processed or unprocessed tobacco intended for retail sale is considered as ready-to-use smoking tobacco. Tobacco is deemed to be put up for retail sale if the product is stored outside an excise warehouse. Only a growing plant is excluded, i.e. the land under a growing tobacco plant does not have to be registered as an excise warehouse. A tobacco plant must be stored in an excise warehouse after harvesting, otherwise the tobacco is considered as smoking tobacco put up for retail sale.
Processed or unprocessed tobacco can be stored as non-excise goods only in an excise warehouse and from there it can be dispatched to another Member State or exported to a country outside the Union without it being subject to excise duty. The requirements and procedures established for the movement of excise goods released for consumption apply on processed and unprocessed tobacco that is shipped to Estonia or from Estonia to foreign countries for commercial purposes.
A person will be liable for payment of excise duty when the person releases tobacco products for consumption (introduces tobacco products into Estonia without an excise suspension arrangement or moves out of the excise suspension arrangement to a normal warehouse or shop).
Excise duty is paid by an excise warehouse keeper on tobacco products produced in Estonia; by an excise warehouse keeper, a registered consignee or a recipient of tobacco products on tobacco products shipped to Estonia from another Member state; by an importer on tobacco imported into Estonia.
An excise suspension arrangement is the suspension of a tax liability upon the production, storage or transport of excise goods. Only authorised persons (an excise warehousekeeper, registered consignee, including a consignee registered as an occasional recipient of goods) can operate under the excise suspension arrangement.
|Product||Excise duty rate
|Excise duty rate
|Excise duty rate
|Cigarettes||86,50 euros/1000 pieces + 30% of the maximum retail price||91,30 euros/1000 pieces + 30% of the maximum retail price||96,30 euros/1000 pieces + 30% of the maximum retail price|
|145,60 euros/1000 pieces||152,85 euros/1000 pieces||160,50 euros/1000 pieces|
|Cigarillos||151 euros/1000 pieces + 10% of the maximum retail price|
|211 euros/1000 pieces|
|Cigars||151 euros/1000 pieces + 10% of the maximum retail price|
|211 euros/1000 pieces|
|Smoking tobacco||97,10 euros/kilogram||101,90 euros/kilogram||107,00 euros/kilogram|
|Tobacco liquid||0,2 euros/millilitre *|
|Solid tobacco substitute||97,10 euros/kilogram||101,90 euros/kilogram||107,00 euros/kilogram|
|Other alternative tobacco product||0,2 euros/gram|
* During the period from 1 April 2021 to 31 December 2022, tobacco liquids are not subject to excise duty.
Excise duty on cigarettes, cigars and cigarillos without revenue stamps is calculated on the basis of their prevailing price at the time when the tax liability arises.
THE PREVAILING PRICE OF CIGARETTES
In 2022, the prevailing price of cigarettes is 4,47 euros.
In 2021, the prevailing price of cigarettes was 4,27 euros.
In 2020, the prevailing price of cigarettes was 4,07 euros.
In 2019, the prevailing price of cigarettes was 3,78 euros.
In 2018, the prevailing price of cigarettes was 3,55 euros.
THE PREVAILING PRICE OF CIGARS
In 2022, the prevailing price of cigars is 5,39 euros per cigar.
In 2021, the prevailing price of cigars was 4,18 euros per cigar.
In 2020, the prevailing price of cigars was 5,70 euros per cigar.
In 2019, the prevailing price of cigars was 7,83 euros per cigar.
In 2018, the basis was the minimum amount of excise duty 211 euros per 1000 pieces.
THE PREVAILING PRICE OF CIGARILLOS
In 2022, the prevailing price of cigarillos is 0,54 euros per cigarillo.
In 2021, the prevailing price of cigarillos was 0,53 euros per cigarillo.
In 2020, the prevailing price of cigarillos was 0,64 euros per cigarillo.
In 2019, the prevailing price of cigarillos was 0,64 euros per cigarillo.
In 2018, the basis was the minimum amount of excise duty 211 euros per 1000 pieces.
The sales restriction applies if the rate of excise duty imposed on the product changes at the same time as the introduction of a new design for revenue stamps. When the new design of revenue stamp enters into force, all tobacco products released for consumption must be marked with the new design that has entered into force and tobacco products bearing the revenue stamp with old design must not be released for consumption as of that date.
Products released for consumption before the entry into force of the new excise duty rate and revenue stamp design are allowed to be sold for another three calendar months and thereafter can only be stored in an excise warehouse.
Because of the sales restriction, goods marked with a revenue stamp with the old design are taken from consumption to an excise warehouse with an accompanying document drawn up by an economic operator and the accompanying document must indicate the manufacturer’s lot code and, in the case of cigarettes, cigarillos and cigars, the maximum retail price.
Reporting the movement and stock of tobacco products returned from consumption to excise warehouse due to sales restriction
- Products that have been returned from consumption are reported in the field 2.4 “Subject to excise duty” of a report on the movement and stock of tobacco products.
- In the case of destruction of products together with revenue stamps, the quantity of products destroyed is reported in the field 4.4 “Total quantity subject to excise duty” in the corresponding product column.
- When removing a revenue stamp with the old design from a product and affixing a revenue stamp with the new design, the operation is reported with two entries: the quantity from which the revenue stamp is removed must be entered in field 4.4 “Total quantity subject to excise duty” and the same quantity in the field 3 “Production”.
- When products with the new revenue stamp design are released for consumption, it is reported in the fields 4.5 “Subject to excise duty” and 4.4 “Total quantity subject to excise duty”.
Removal of revenue stamps from tobacco products and destruction of goods under customs supervision and refund of excise duty
It is up to the importer and/or excise warehousekeeper to decide whether an old revenue stamp can be removed from and a new revenue stamp added to products or if the products have to be destroyed.
For the purpose of refund, the revenue stamp may be removed from the product only under the supervision of tax authorities.
For the removal of revenue stamps or for the destruction of revenue stamps with the goods, an application (reflecting the type of revenue stamp and/or maximum retail price affixed to the product) with supporting documents must be submitted to the excise division of the tax department at firstname.lastname@example.org.
In addition to the application, the excise warehousekeeper must provide information about the accompanying documents with which the products were taken from consumption to excise warehouse and documents proving the release for consumption and payment of excise duty on the products (e.g. the numbers of notices of release for consumption of revenue stamps or the SNR numbers of delivery notes T and details of the excise declaration).
You can apply for a refund of excise duty for products destroyed with revenue stamps in the presence of representatives of the tax authority, as well as for revenue stamps returned for the purpose of refund (clause 456(1) 4) of Alcohol, Tobacco, Fuel and Electricity Excise Duty Act).
In order to apply for the refund of excise duty, an application must be submitted and accompanied by a report drawn up by the tax authority concerning the return of revenue stamps removed or the destruction of products.
The handling of tobacco products means:
- the production, processing or packaging of tobacco products (manufacture of tobacco products);
- trading in tobacco products;
- the possessing, storage or distribution of tobacco products for commercial purposes or in a commercial quantity.
In order to engage in the retail and wholesale distribution of tobacco products, an economic operator must submit a notice of economic activities to the register of economic activities. The notice of economic activity must contain information on tobacco products and places of business, and separate information on the import and export of tobacco products.
Register of economic activities
Both cross-border and domestic distance sales of tobacco products are prohibited (section 22 of the Tobacco Act). It is also prohibited to deliver tobacco products to Estonia via distance selling.
Distance selling is the sale of a tobacco product to a consumer by means of a distance contract, such as selling via an online shop.
Exemption from excise duty on tobacco products
The exemption from excise duty applies to tobacco products:
- consumed on board an aircraft or ship during a journey between Member States or
- used by a civilian staff of foreign armed forces or acquired to supply their canteens.
An excise warehousekeeper may produce, process, store, receive and dispatch tobacco products not subject to excise duty under an excise duty exemption in an excise warehouse.
The excise duty arises when tobacco products are dispatched from an excise warehouse without an excise suspension arrangement, i.e. the products are subject to excise duty only after they have been removed from the excise warehouse.
The excise duty is paid periodically by the excise warehousekeeper, at the latest on the 20th day of each month. By that date, he shall also submit an excise declaration.
The excise warehousekeeper operates on the basis of an activity licence. More information: Application for activity licence (in Estonian)
A registered consignee will be liable to tax on the receipt of tobacco products dispatched from another Member State. He may keep only tobacco products subject to excise duty at his place of business.
A registered consignee has one calendar month for tax period and excise duty must be paid no later than the 20th day of the month following the month in which the tax liability arises. By that date, he shall also submit an excise declaration.
A registered consignee operates on the basis of an activity licence. More information: Application for excise licence (in Estonian)
A recipient of tobacco products released for consumption in another Member State and shipped to Estonia for commercial purposes becomes subject to tax liability upon the receipt of tobacco products. The consignee must submit an excise declaration and pay excise duty on the fifth day from the date on which the tax liability arises.
The recipient must notify the Tax and Customs Board of its intention to accept tobacco products and, at the request of the tax authority, will provide a security for compliance with the tax liability which may arise before the tobacco products are dispatched from another Member State.
There are ten types of revenue stamps for tobacco products: the revenue stamp for cigarettes; revenue stamp A for smoking tobacco; revenue stamp B for smoking tobacco used in cigarettes; revenue stamp L for tobacco product intended for consumption by heating; revenue stamp G for cigars; revenue stamp D for cigarillos; revenue stamp C for nicotine-containing tobacco liquid; revenue stamp H for nicotine-free tobacco liquid; revenue stamp E for solid tobacco substitutes; revenue stamp K for other alternative tobacco products.
In case of tobacco products other than cigarettes, the marking of the type of tobacco product and quantity of tobacco products in the sales packaging is printed on revenue stamps. In case of cigarettes, cigarillos and cigars, their maximum retail price is printed on revenue stamps as well.
When released for consumption or imported from third countries, tobacco products must be revenue stamped.
Tobacco products are revenue stamped only if there is an obligation to pay excise duty on the products in Estonia.
A revenue stamped product is not permitted to be exported, shipped to another Member State or transferred exempt from excise duty, for example on board a vessel which is travelling outside the European Union for commercial purposes.
A revenue stamp is deemed to be the object of an offence if it is affixed to a product which is not subject to revenue stamping.
Revenue stamps can be ordered from the Tax and Customs Board by an importer of tobacco products from a third country, an excise warehousekeeper, a registered consignee or a person who delivers tobacco products released for consumption in another Member State to Estonia for commercial purposes if he fulfils the following conditions:
- the person holds a valid excise warehouse activity licence or activity licence of a registered consignee; the importer holds a registration for import of tobacco products in the register of economic activities, or the person holds a registration for wholesale or retail sale of tobacco products in the register of economic activities; and submits a written notification of the intention to receive excise goods before the excise goods are dispatched from another Member State;
- the person does not have tax arrears, including tax arrears payable in instalments;
- the person has compensated for the costs of printing revenue stamps incurred as a result of the return of the revenue stamps or not accepting the revenue stamps ordered;
- the person has provided security accepted by the Tax and Customs Board;
- the person has notified the place where the excise goods are to be revenue stamped.
Revenue stamps for tobacco products can be ordered electronically via the MAIS database for managing revenue stamps. When ordering tobacco revenue stamps for the first time, please inform us by sending an e-mail to email@example.com. The email must indicate the name and registry code of the person ordering the revenue stamps.
Revenue stamps are issued in Tallinn at Lõõtsa 8a.
Tobacco products can be revenue stamped in excise warehouses and customs warehouses in Estonia.
Tobacco products delivered to Estonia, with the exception of alternative tobacco products, may be revenue stamped at the place of business of the shipper of the goods released for consumption in another Member State and at the place of business of the registered consignee if the revenue stamps are in possession of the person at the latest on the day of receipt of the tobacco products at the place of business and the revenue stamps are affixed to the products immediately.
There is also the possibility of revenue stamping tobacco products in another Member State or in a non-Community country. Revenue stamped tobacco products can be imported and accepted from another Member State only by the person who ordered the revenue stamps.
Revenue stamps must be affixed to the tobacco product within 90 calendar days from the date of receipt of the revenue stamps from the Tax and Customs Board.
If the time limit is exceeded, the person who ordered the stamps must pay excise duty on the revenue stamps in an amount corresponding to the amount of excise duty calculated on the tobacco product for which the revenue stamps have been ordered.
The time limit for affixing revenue stamps to tobacco products may be extended by a further 90 calendar days at the request of the recipient of the revenue stamps. It is prohibited for the person who ordered the revenue stamps to transfer the revenue stamps which are not affixed to a tobacco product or their sales packaging to another person.
The activities carried out with revenue stamps and the movement of revenue stamps (ordering, extending the time limit for affixing, affixing to the product, dispatching to consumption, return, invalidation) must be notified in the MAIS database for managing revenue stamps.
The person ordering the revenue stamps can also see the processing of revenue stamps and electronic reporting in real time via the MAIS database.
Tobacco products not subject to excise duty move between Member States under an excise suspension arrangement. Tobacco products dispatched from another Member State under an excise suspension arrangement can be received in Estonia in an excise warehouse or at the place of business of a registered consignee. It is possible to receive products released for consumption in another Member State outside excise warehouse if the packaging of the products already has health warnings in Estonian and the recipient has ordered revenue stamps on the products.
When tobacco products are moved between Member States, the tobacco products must be accompanied by the compulsory excise consignment delivery notes provided for in EU legislation, electronic delivery note eSL (tobacco products moving under an excise suspension arrangement) or SAAD (tobacco products released for consumption).
The electronic delivery note eSL is processed in the EMCS (Excise Movement and Control System).
The processing of the SAAD delivery note and national delivery notes A and T takes place in the electronic system SADHES (the national electronic management system for accompanying documents of excise goods).
Delivery of tobacco products released for consumption in another Member State to Estonia
Before a tobacco product is dispatched from another Member State, the recipient (including excise warehousekeeper) of the tobacco product released for consumption in another Member State must:
- notify the Tax and Customs Board via the national electronic management system for accompanying documents of excise goods (SADHES) by means of a SAAD prior notification of the intention to accept a tobacco product.
Within 5 days after receiving the tobacco product, the recipient must:
- inform the Tax and Customs Board of receipt of the tobacco product via SADHES using the SAAD notification;
- confirm the receipt of the tobacco product on the delivery note accompanying the goods and indicate on the delivery note the quantity of tobacco product actually received if any shortage/surplus occur;
- submit to the Tax and Customs Board a copy of the delivery note received through SADHES, signed by the recipient of the excise goods.
Dispatch of a tobacco product subject to excise duty to another Member State
The person who dispatches tobacco products and alternative tobacco products as well as processed and unprocessed tobacco released for consumption to another Member State under an excise suspension arrangement must:
- submit the SAAD delivery note to the Tax and Customs Board via SADHES before dispatch;
- allow the Tax and Customs Board to check the consignment before it is dispatched.
When a tobacco product is transported to another Member State, the goods must be accompanied by a printout of the SAAD delivery note drawn up in SADHES.
When alternative tobacco products or processed or unprocessed tobacco are dispatched to another Member State under an excise suspension arrangement, the consignor (excise warehousekeeper) must inform the tax authorities of the receipt of those goods in the other Member State and provide a copy of the delivery note confirming receipt of excise goods via SADHES.
The import and export of tobacco products may be carried out by an economic operator engaged in the wholesale or retail trade or catering activities and whose records in the register of economic activities also contain an indication of the import or export of tobacco products.
An importer of tobacco products is the person who declares or on whose behalf tobacco products are declared for the customs procedure for release for free circulation within the meaning of the Union Customs Code. Import is also the delivery of tobacco products to Estonia taking into account the specific characteristics of certain territories laid down in Articles 5 and 6 of Council Directive 2008/118/EC.
The importer of tobacco usually becomes liable to tax on the importation of tobacco products on the date on which the customs debt is incurred and pays the excise duty on importation in accordance with customs rules.
An exporter of tobacco products is a person who has the authority to decide whether to send goods outside the EU or is a party to the above-mentioned agreement.
Export is also the transport of tobacco products from Estonia taking into account the specific characteristics of certain territories laid down in Articles 5 and 6 of Council Directive 2008/118/EC.
The export of tobacco products is carried out in accordance with the rules governing the export of excise goods.
Tobacco products which are exempt from excise duty can be transported from an excise warehouse on board of an aircraft or ship located in another Member State if the excise goods have been placed under the customs procedure of export upon the transportation.
In order to dispatch tobacco products under an excise suspension arrangement on board an aircraft or ship located in another Member State, the excise warehousekeeper must complete an e-delivery note in the EMCS (type of destination — export, customs office of export — Estonian customs office of export) and an export customs declaration in Complex (profile A, procedure code 1045, additional procedure code F61, customs office of exit — appropriate customs office of destination, previous document — electronic delivery note eSL).
In order to complete the electronic delivery note correctly, the customs declaration must receive an exit mark in the ECS system.
It is an obligation of the manufacturer of tobacco products to label the sales packaging of tobacco products with a unique identifier consisting of a combination of numbers and letters and the movement of tobacco products must be recorded in order to be able to track and trace the movements of these products throughout the European Union.
There is also an obligation to add a security feature on the packaging of tobacco products which facilitates verification of the authenticity of the products.
Currently, the tracking and tracing system and the safety feature requirement apply to cigarettes and roll-your-own tobacco, while other tobacco products are subject to the requirement as of 20 May 2024.
Unit packets of tobacco products are required to be marked with a unique alphanumeric identifier (unique identifier).
The unique identifier allows to define the date and place of manufacture of the tobacco product, the manufacturing facility, the machine used for the manufacture of the tobacco product, the production shift or time of manufacture, the product description, the market for retail sale, the intended shipment route and the importer for importation into the Union, as well as the identity of all purchasers from manufacturing to the first retail outlet. This data is included in the unique identifier affixed to the unit packet of tobacco product during its manufacture or before being imported into the Union.
The competent issuer of unique identifier in Estonia is Allexis s.r.o.
The identifiers of the unit packets and aggregated packaging of tobacco products, as well as the identification codes of a tobacco handler can be requested on the website www.idissuer.ee.
EIn Estonia, the security feature of tobacco products is a revenue stamp with a high degree of security and meeting the requirements. Tobacco products subject to the obligation to affix a security feature but which are not subject to revenue stamping under the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act must be fitted with a security feature of the manufacturer or importer. Before the introduction of the manufacturer’s or importer’s security feature it must be submitted to the Tax and Customs Board for approval.
The manufacturer or importer is responsible for ensuring that the security features he uses comply with the conditions laid down by the tobacco product tracking and tracing system:
- the security feature is affixed to each unit packet of tobacco products;
- the security feature must be composed of at least five types of authentication elements of which at least one is overt, one is semi-covert and one is covert;
- at least one of the five authentication elements of the security feature must come from a third party service provider meeting the independence criteria established by the tobacco product tracking and tracing system;
- the authentication elements of the security feature may include all types of overt, semi-covert and covert authentication features set out in the Annex to Commission Implementing Decision (EU) 2018/576;
- the security feature is affixed to unit packets by affixing, printing or a combination of these methods.
Last updated: 03.10.2022