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Tax Gap of Heated Tobacco Products in Austria

In Austria, tobacco taxation is regulated under the Tobacco Tax Act 1995, BGB1. Nr. 704/1994.  Federal Law BGBL1 Nr. 104/2019 amended the Tobacco Tax Act to include heated cigarettes, which have been subject to a pure specific excise tax (by weight of tobacco) since April 1st, 2019.  

The initial tax rate was set at EUR 110 per kg tobacco, but several months later a three-year plan was adopted to progressively increase all tobacco taxes through 2022. On March 19th, 2020, the National Council amended the Act again as part of several measures adopted in response to the COVID-19 pandemic. These involved postponing the planned tobacco tax increase from April 1st to October 1st, 2020, and reducing the amounts by which the tax will increase over the next few years. Current and planned tax rates for heated tobacco in Austria are now as follows:

  • EUR 110 per kg until November 30, 2020
  • EUR 123 per kg from October 1st, 2020 to March 31st, 2021 
  • EUR 136 per kg a from April 1st, 2021 to March 31st, 2022
  • EUR 149 per kg after March 31st, 2022.

Given the change in the tax rate for the last 3 months of 2020, for 2020 the maps reflect a weighted average tax of the two rates based on the number of months.

 

Cigarettes are taxed according to a mixed system with a minimum excise, and schedules changes in the next 3 years as follows:

  • Until November 30, 2020: an ad-valorem of 37.125% or the retail price, a specific excise of EUR 59.25 per 1000 sticks, and a minimum excise if EUR 150 per 1000 sticks
  • From October 1, 2020 to March 31, 2021: an ad-valorem of 34.5% or the retail price, a specific excise of EUR 68 per 1000 sticks. The minimum excise does not change.
  • From April 1, 2021 to March 31, 2022: an ad-valorem of 33% or the retail price, a specific excise of EUR 73 per 1000 sticks. The minimum excise does not change.

 

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Last Updated Feb. 22, 2021