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Tax Gap of Heated Tobacco Products in Luxembourg

Under the current tax law, heated tobacco is not considered tobacco and therefore is not subject to excise taxation. For comparison, the category “other tobacco products” is subject to a mixed excise tax with a minimum specific tax. Since January 2020, the specific rate for “other tobacco products” has been EUR 18.25 per kilogram and the ad-valorem 33.75%. The minimum excise was EUR 54.5 per kilograms until January 2021 and was increased to EUR 55.8 per kilograms from Feb 1, 2021.

Cigarettes are subject to a mixed excise system that includes a specific excise and an ad-valorem tax with a minimum specific tax. Since January 1, 2020, the specific excise has been 19.1414 per 1000 sticks, and the ad-valorem tax 46.65% of the retail selling price. The minimum excise is EUR 118.3 per 1000 sticks. The rates remain the same for fiscal year 2021.


Last Updated Feb. 22, 2021