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Tax Gap of Heated Tobacco Products in Croatia

In 2017, Croatia amended the Law on Excise Duties to include new categories for tobacco and nicotine products, including one for heated tobacco. The tax came into effect on January 1, 2017. Despite being in a separate category, heated tobacco is taxed at the same rate as “other smoking tobacco,” under a specific tax system based on the weight of tobacco mixture. On April 1, 2020 (the beginning of the Croatian tax year,) the specific excise tax on heated tobacco and other smoking tobacco was increased from HRK 600 to HRK 800 per kg tobacco. Electronic cigarettes are not subject to excise taxation.

The excise tax system for cigarettes consists of a mixed system  which includes a specific excise, an ad-valorem excise, and a minimum excise duty. Since April 1, 2020, the rates are as follows:

  • Specific excise: HRK 370 per 1000 sticks
  • Ad-valorem excise: 34% of the retail sales price
  • Minimum excise: HRK 824 per 1000 sticks

The Ministry of Finance announced plans to increase the tax on tobacco products from March 1, 2021. The draft decree proposes the following: 

  • For heated tobacco, the specific excise tax would increase to HRK 1400 per kg of tobacco.
  • For conventional cigarettes, the specific excise would increase to HRK 400 per 1000 sticks, and the ad-valorem will remain at 34% of the retail price. The minimum excise would increase to HRK 888 per 1000 sticks.


Last Updated Feb. 24, 2021