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Tax Gap of Heated Tobacco Products in the Netherlands

Heated tobacco products were introduced in the Netherlands in 2017 with the launch of IQOS by Philip Morris International. Heated tobacco is not defined in the tax code and is taxed by default under the category of “smoking tobacco”. A pure specific excise tax system is applied to smoking tobacco, and therefore to heated tobacco as well. As of April 2020, the rate is EUR 155.97 per kilogram. It is scheduled to increase to  EUR160.91 per kilogram starting Apr. 1, 2021.

The Netherlands applies a mixed excise tax system to cigarettes. As of April 1, 2020, the specific excise tax rate is EUR 219.25 per 1000 sticks, the ad-valorem excise rate is 5.0% of the retail selling price, and the minimum excise duty is EUR 238.31 per 1000 sticks. The rates are scheduled to increase to EUR 223.82 per 1000 sticks for the specific tax and EUR 243.25 per 1000 sticks for the minimum excise duty (the ad-valorem will remain the same).


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Last Updated Feb. 23, 2021