The German supplementary excise duty imposed on heated tobacco is in line with EU law
C‑336/22. – f6 Cigarettenfabrik GmbH & Co. KG | The German supplementary excise duty imposed on heated tobacco is in line with EU law.
The plaintiff in case C-336/22 is a German tobacco product manufacturer that produces tobacco sticks for e-cigarettes. Until December 31, 2021, excise duty on pipe tobacco had to be paid for such sticks in Germany, but from 2022 onwards, the Law on Tobacco Tax introduced a supplementary duty as well. This supplementary duty corresponded to 80% of the difference between the excise duty on cigarette and the “base” excise duty calculated with the pipe tobacco excise duty.
The plaintiff declared the supplementary duty but contested the legality of its imposition before the Düsseldorf Finance Court. Firstly, it argued that the levying of the supplementary tax on heated tobacco is contrary to the Excise Directive (Directive 2008/118). It also disputed the existence of a “specific purpose” justifying the imposition of the supplementary tax, as the revenues from the supplementary duty did not have to be allocated to health protection by the German state. According to the plaintiff, the new supplementary duty also violated the principle of equal treatment because different tobacco products within the “other smoking tobacco” category were treated differently.
The Düsseldorf Finance Court initiated preliminary ruling proceedings. The European Court of Justice’s position is that within the conceptual framework of the Excise Directive, heated tobacco sticks for e-cigarettes fall under the concept of “smoking tobacco” and as such can be subject to excise duty. The Court pointed out that the “specific purpose” advocated by the plaintiff was also met because the German legislature aimed to align the excise duty on e-cigarette sticks with that of cigarettes to discourage cigarette quitters from switching to heated tobacco, and public health protection is one of the goals supported by the Excise Directive. Regarding the prohibition of discriminatory treatment, the Court explained that the “other smoking tobacco” category necessarily includes various tobacco products, so applying a uniform tax rate to them would distort competition.
