3. Selected Excise Duties in OECD Countries
Although excise may be levied on a broad range of products, excise taxes on alcohol, tobacco and hydrocarbon oils in particular raise significant revenues for governments in all OECD countries. In recent decades, governments have increasingly used these taxes not only to raise revenue but also to influence customer behaviour where consumption of certain products is considered harmful to health or to the environment.
The main characteristics of excise duties, and their policy objectives as revenue raisers and tools to influence consumer behaviour, are largely shared amongst OECD countries. However, their rates and structure differ significantly and it is therefore not straightforward to estimate the order of magnitude of the total tax burden on specific excisable goods. For example, standard excise rates on beer may be tempered by the application of reduced rates on small breweries. For tobacco products, different duty rates applicable to substitutes (cigarettes and rolling tobacco) may also blur the picture. Similarly, excise duties on road fuels reflect only a part of automotive taxation policy that also includes road tolls, taxes on registration and use of vehicles, taxes on insurance, etc.
This chapter provides an overview of the main differences in the structure of excise duties and illustrates their increasing use as an instrument to influence behaviour. It includes an overview of the key characteristics of excise duties and their revenue trends (Section 3.2). It then looks in some further detail at the excise rates structure for alcoholic beverages (Section 3.3), tobacco products (Section 3.4) and heating fuel oil for households (Section 3.5). The taxation of road fuels is discussed in Chapter 4 on vehicle taxation.
3.2.1. Excise duties are typically targeted at specific product categories
Excise, unlike other general consumption taxes (incl. value added taxes - VAT), is levied only on specific goods. Although many products can be subject to excise, such as chocolate, coffee and orange juice, this chapter focuses on the three principal product groups that are subject to excise in all OECD countries: alcoholic beverages, mineral oils and tobacco products.
Before looking at the key characteristics of these three groups and their comparative treatment in different countries, it is useful to recall the following general characteristics of excise duties:
Excise duties are generally calculated by reference to the weight, volume, strength, or quantity of the product, combined in some cases with the value, but sometimes on a value basis only.
Excise duties normally become payable when the goods enter free circulation. Transfers of ownership of excisable goods can take place within a controlled warehousing environment or between registered operators without creating an excise charge.
The excise system is characterised by small numbers of taxpayers that are active in the manufacturing, wholesale stage or importation of the three main product groups.
Unlike VAT, which is collected through a staged collection process by all the stakeholders in the value chain until the stage of final consumption (see Chapter 2), excise duties are normally collected only once, from a registered operator, at the time the goods are released for consumption. In the European Union, the movement of excisable products between Member States takes place under a duty-suspension arrangement until the moment these products are released for free circulation. In the United States, excise duties are levied by the federal government and by many states and local governments. Federal excise taxes are collected by the Internal Revenue Service while states may impose the tax according to their own rules and rates.
The level of revenues raised by excise duties and their social and economic impact depend on the structure of these taxes. There are two main ways of levying excise duties on excisable products: ad valorem and ad quantum. Under an ad quantum excise (also referred to as a “specific” excise), a fixed amount of tax is levied per unit of the product (e.g. USD 1 per litre), which means that this is a tax on the volume of sales. Under an ad valorem excise, the tax is levied as a proportion of the product price (e.g. 20% of the selling price), and it is thus a tax on the value of sales. Excise duties can also be levied as a mix of ad valorem and ad quantum excises in a number of cases, such as for instance the tobacco taxes as presented in Annex Table 3.A.4. Ad quantum taxes requires a precise definition of the nature and characteristics of the tax base (e.g. a litre of unleaded gasoline with 94 RON) while an ad valorem tax is simply based on the price of the excisable good.
Most excisable products naturally present a bundle of different characteristics (volume, weight, strength, octane, alcoholic or carbon content, etc.). Ad quantum taxes remain unaffected by changes in the product characteristics that have not been defined as being relevant for the tax base, whereas ad valorem taxes bear on all the characteristics of the product that are reflected in the price. Depending on the structure of the excise, its impact on production and consumption is different. For example, a specific ad quantum excise on beer (per % absolute alcohol in volume) may encourage brewers to develop varieties of beer, including more exclusive labels, that could be offered at higher prices while remaining subject to the same level of excise as the cheaper product. On the other hand, ad valorem taxes may discourage costly improvements in product quality or encourage consumers to switch to low-cost products. An ad quantum excise may be easier to administer, because it requires only the determination of the physical quantity of the product taxed.
The tax revenue raised from excise duties and the revenue impact of changes of the design of these taxes are influenced by a wide range of factors. When assessing the impact of change to excise duty regimes, it is important to note that excise is normally part of the VAT base, i.e. VAT is usually levied on the duty-paid value of the excise products. The revenue impact of any changes in an excise tax will thus also be influenced by the level of the VAT rate on a given excisable product.
There may be a case for a combination of ad quantum and ad valorem taxes if the tax is aimed at discouraging consumption of, or maximising revenue from, both high and low value products. Where there are large differences in prices of a product, an ad quantum tax will for instance be less likely to reduce demand for the high value product and will raise less revenue from it than an ad valorem tax. Higher income consumers who are more likely to consume high value products may be less responsive than low-income groups to the imposition of a given tax (although ad quantum taxes may reduce the price differentials). If the aim is to influence behaviour, the imposition of a higher aggregate tax on these expensive products will therefore be needed. To achieve this, an ad valorem tax can be combined with an ad quantum tax, which is common in tobacco taxation (see Section 3.3 below). Setting the “optimal” balance between ad quantum and ad valorem components of excise will depend of the products concerned, the market structure and the policy objective; hence, there is no optimal balance between the two taxes in absolute (Keen, 1998[1])
Finally, illicit trade and opportunities for cross border shopping are other factors that might influence the revenue potential and the impact on consumption of excisable products.
All these factors play a role in governments’ policies depending on their policy objectives, whether these are to reduce consumption of specific products considered harmful to health while protecting certain sectors or small producers or to increase revenue or both.
3.2.2. Excise revenue in OECD countries has seen a long decline
In the OECD countries, the relative share of excise duties in total tax revenue has seen a long decline between 1975, when they accounted for 10.5% on average, and 2020 when these taxes represented 6.9% of total tax revenue on average (see Annex Table 1.A.5). Although some large differences between countries can be observed, with excise accounting for 1.8% of total tax revenue in New Zealand and 17.2% in Türkiye, the weight of excise duties is between 4% and 9% of total tax revenue in the majority of OECD countries (28 out of 38). These taxes account for less than 5% of total taxes in nine OECD countries (Australia, Austria, Belgium, Canada, Israel, Japan, New Zealand, Switzerland and the United States). They account for more than 10% of total tax revenue in four OECD countries (Latvia, Lithuania, Mexico and Türkiye) down from thirteen OECD countries in 2010 (see also Chapter 1).
3.3.1. There has been a resurgence of taxation of alcoholic beverages as part of public health policies
Although taxes on alcoholic beverages are amongst the oldest sources of governmental revenue, the growing importance of other forms of consumption taxes, in particular general consumption taxes such as VAT, has considerably reduced the share of these taxes in total taxation. There has however been a resurgence of interest in specific taxation of alcoholic beverages in recent years as a means of influencing consumer behaviour in line with public health policies.
Alcoholic beverages exist in a wide variety across the world and are produced from a wide range of fermented or distilled ingredients (grapes, apples, malt, rice, etc.). The Customs Combined Nomenclature Code (CN) provides a classification of alcoholic beverages with which excise categories are intrinsically linked. The CN includes six main categories of alcoholic beverages: beer made from malt (code 22.03); wine of fresh grapes, including fortified wines (code 22.04); vermouth and other wine of fresh grapes flavoured with plants or aromatic substances (code 22.05); other fermented beverages (for example, cider, perry, mead), mixtures of fermented beverages and mixtures of fermented beverages and non-alcoholic beverages (code 22.06); undenatured ethyl alcohol of an alcoholic strength of 80 % pure alcohol by volume (abv) or higher (code 22.07) and undenatured ethyl alcohol of an alcoholic strength of less than 80 % abv (code 22.08). There are inevitably subdivisions within each of these broad categories but the use of the internationally accepted nomenclature enhances consistency and helps to avoid contradictory definitions in applying rates. Except otherwise mentioned in country notes, Annex Table 3.A.1 and Annex Table 3.A.2 cover products under CN codes 22.03 and 22.04. Annex Table 3.A.3 covers products not included in Annex Table 3.A.1 and Annex Table 3.A.2.
Given the long history of alcohol taxation, several methods and measures have been developed over time for assessing the alcoholic content of a product. The alcohol by volume (abv) is now the standard measure of the level of alcohol contained in an alcoholic beverage. It is defined as the number of litres of pure ethanol present in 100 litres of solution at 20 °C, expressed as a percentage of the total volume. Annex Table 3.A.1 and Annex Table 3.A.2 provide an overview of excise taxation of beer and wine, whereby the alcoholic content is expressed in percentage abv. In some countries, the excise taxation of beer calculates the alcoholic content in degree Plato (measuring the density of beer wort in terms of percentage of extract by weight). To allow cross-country comparison, Annex Table 3.A.1 shows the estimated amounts of tax per percentage abv for these countries based on a conversion from the amounts of tax per degree Plato. There is no precise method to convert from degrees Plato and alcohol per volume but for tax purposes, it is assumed that 1% abv is equivalent to 2.5 degrees Plato. The tax amounts per degree Plato have thus been multiplied by 2.5 to obtain the rates in degree abv for the relevant countries in Annex Table 3.A.1.
Excise can be applied to alcoholic beverages in two main ways. The duty can be either ad quantum in relation to the alcoholic content of the product or ad valorem calculated according to the value of the product. The two methods are generally combined in OECD countries where both the volume based on alcohol content and the value of the product are taken into account for determining the total amount of taxes.
Member States of the European Union apply a harmonised structure for excise duties on alcohol and alcoholic beverages (Council Directives 92/83/EEC on the harmonisation of the structures of excise duties on alcohol and alcoholic beverages; and 92/84/EEC on the approximation of the rates of excise duty on alcohol and alcoholic beverages; complemented by Directive EU 2020/262 laying down general arrangements for excise duty and their movement between Member States).
The World Health Organization recommends increasing taxes on alcoholic beverages as a one of the most cost-effective policies to lower drinking levels in order to combat alcohol-related diseases, including cardiovascular diseases, cancer and other non communicable diseases (World Health Organization, 2010[2]). From a public health perspective, it has been argued that the best duty structure links the taxation level to alcohol content, keeps pace with inflation and avoids substantial disparities between different beverage types (Colin Angus, 2019[3]). It is recognised, however, that the alcohol market creates employment in agriculture, industry and distribution while generating tax revenue for governments. Public health measures to reduce harmful use of alcohol are therefore often balanced with other goals and considerations such as maintaining ancestral industries, safeguarding a free market and consumer choice and ensuring government revenues.
3.3.2. Excise rates on beer vary widely among OECD countries
Beer is taxed under both VAT and excise duties in all OECD countries. In addition, the European Directives have set a minimum excise duty in beer (i.e. EUR 1.87 per hl/degree alc.), which is low enough not to be binding for the vast majority of the Member States and also provides for a possible reduction of excise for beer produced by small and independent breweries.
Annex Table 3.A.1 illustrates the complexity of the computation of excise duties in many instances. The existence of differing subcategories and specific rates (e.g. for low-alcohol products and for small breweries) and calculations based on both the value and the nature of the product, make it challenging to estimate the precise excise tax burden at the consumer level. This Table also illustrates the large differences of taxation levels between OECD countries, with the standard excise rate on beer varying from less than USD 5 per hectolitre per % abv (Czech Republic, Germany, Luxembourg, Slovak Republic and Türkiye) up to more than USD 20 (Finland, Ireland, New Zealand, Sweden and United Kingdom) and the highest levels being observed in Finland (USD 44.76) and Israel (USD 74.30). Three quarters of OECD countries (30 out of 38) apply reduced rates to small breweries, with a progressive increase in the tax rate according to their annual production in many cases. country notes to Table 3.A.1 illustrate the wide diversity of these tax regimes. Four OECD countries do not apply any ad quantum excise to beer but only ad valorem taxes (Chile, Colombia, Korea and Mexico)
All OECD countries apply the standard VAT rate to beer, except Iceland, which applies the reduced rate of 11%, and the United States where there is no VAT but where sales taxes are levied at the subnational level.
3.3.3. Excise tax rates on wine vary from zero to more than USD 6 per litre in OECD countries
Annex Table 3.A.2 considers two main categories of wine: still wine and sparkling wine. In addition, it shows the difference of tax levels between wine and “low-alcohol wine” as defined by member countries. Excise rates on wine vary widely across OECD countries from zero (Austria, Czech Republic, Germany, Greece, Hungary, Israel, Italy, Luxembourg, Portugal, Slovak Republic, Slovenia, Spain and Switzerland) up to more than USD 4 per litre in Finland and Ireland and more than USD 6 per litre in Norway. In 10 OECD countries, sparkling wine is subject to a higher excise rate than still wine (Belgium, Czech Republic, Denmark, France, Hungary, Ireland, Slovak Republic, Türkiye, the United Kingdom and the United States. Four OECD countries do not apply any ad quantum excise to wine but only ad valorem taxes (Chile, Colombia, Korea and Mexico).
All OECD countries apply the standard VAT rate to wine, except Colombia, Luxembourg and Portugal that apply reduced VAT rates of respectively 5%, 14% and 13% to still wine and the United States where there is no VAT but rather retail sales taxes at the subnational level.
3.3.4. No zero-rates are applied to other alcoholic beverages than beer and wine
For other alcoholic beverages than beer and wine (Annex Table 3.A.3), excise duty rates also vary across OECD countries, but to a lesser extent as there are no zero excise rates. These rates range from less than USD 15 per litre of absolute alcohol (Austria, Canada, Czech Republic, Hungary, Italy, Luxembourg, Slovak Republic, Spain and the United States) to up to USD 95 per litre of absolute alcohol in Norway and USD 128 in Iceland. The only countries to apply a reduced VAT rate to these alcoholic beverages are Colombia (5%), Iceland (11%) and Colombia (5%). The United States does not apply a federal VAT but retail sales taxes are levied at the subnational level.
Four OECD countries do not apply any ad quantum excise to these alcoholic beverages but only ad valorem taxes (Chile, Colombia, Korea and Mexico). Country notes to Annex Table 3.A.3 provide a description of the specific regimes applied in OECD countries.
3.4.1. Given their nature, tobacco products have long been an attractive source of revenue for governments
Historically, as for alcohol taxation, the primary motivation for tobacco taxation was the raising of government revenue. Nearly all OECD countries have taxed tobacco products for many decades and even for centuries in some cases. The significant tobacco consumption and the relatively low elasticity of demand for tobacco products (i.e. the less than proportionate response of tobacco product consumption to a moderate price increase) along with the small number of producers made these products a particularly attractive target for excise and other taxation. Over time, the clear evidence of the negative health consequences of tobacco use have turned tobacco taxation increasingly into a tool to reduce tobacco consumption. The World Health Organisation (WHO) provides economic evidence that increased taxes that are passed on to tobacco users effectively reduce tobacco consumption. It shows that tobacco taxation is highly cost-effective, combining the potential for considerable impact on tobacco consumption with a low implementation cost. Returns and economic benefits from tobacco taxation have proven to be several times higher than the cost of these measures (World Health Organisation, 2021[4]).
As with alcohol and mineral oils, tobacco products are subdivided into a number of categories,0 i.e. cigarettes, cigars, cigarette rolling tobacco and pipe tobacco. New tobacco products have also emerged such as Heated Tobacco Products (HTP), and Electronic Nicotine Delivery Systems (ENDS), which may be subject to specific tax rates (but are outside the scope of this publication).
Unlike excises on alcoholic beverages and mineral oils, which are almost exclusively ad quantum, the majority of countries use a combination of ad quantum and ad valorem elements to calculate excise on tobacco products.
3.4.2. The total tax burden on cigarettes is above 60% of the consumer price in almost all OECD countries and above 75% in a majority of them
Annex Table 3.A.4 and Annex Table 3.A.5 show large differences in tax rates among OECD countries. Differences in tax levels can also exist in jurisdictions that allow excises to be levied at the sub-national level, such as in the United States where, for instance, local excise rates on a pack of 20 cigarettes (on top of the federal tax) range from USD 0.17 in Missouri and USD 0.37 in Georgia to USD 4.50 in the District of Columbia and USD 4.35 in Connecticut (Federation of Tax Administrators, 2022[5])
It should be noted that the individual rates or amounts of tax (ad valorem/ad quantum excise, VAT, duties, etc.) per type of tobacco product as shown in Annex Table 3.A.4 are not sufficient to assess the overall tax burden on those products. Ad valorem excises can be assessed on a range of bases (producer price, import price, retail price). A high ad valorem tax on a given product group can be balanced with a low ad quantum excise (or vice versa) when excise is levied on the basis of a mix of both ad valorem and ad quantum taxes. Also the combined effect of the VAT and the excise duties needs to be assessed. A better understanding of the relative taxation levels can be gained by calculating the total tax burden (TTB) as a share of the total retail selling price (RSP) of a given product to the final consumer. This is illustrated in Annex Table 3.A.5 that shows the total tax burden (ad quantum excise + ad valorem excise + VAT) for cigarettes as a share of the retail selling price (RSP) of a pack of 20 cigarettes in OECD countries, based on data extracted from the WHO database (World Health Organization, 2021[6]). This table shows that the total tax burden for a pack of 20 cigarettes varies widely across OECD countries, from 39.97% of the RSP in the United States (national average estimate of federal and local taxes) and 54.96% in Iceland to 88.23% in Finland and 87.64 % in Estonia. The tax burden is above 60% of the RSP in all the OECD countries, except in Iceland and the United States; and above 75% (as recommended by the WHO) in 21 OECD countries (Belgium, Chile, Czech Republic, Denmark, Estonia, Finland, France, Greece, Ireland, Israel, Italy, Latvia, Netherlands, New Zealand, Poland, Portugal, Slovak Republic, Slovenia, Spain, Türkiye and the United Kingdom). The figures provided by the WHO relate to the most sold brand (MSB) of cigarettes in the country. In the European Union, the tax rates calculations are rather based on the Weighted Average Price (WAP) of all brands sold on the market (since 2011). Annex Table 3.A.5 also shows that there may be substantial differences in the pre-tax prices, depending on the structure of the market, the geographic location (particularly taking into account the ease of cross-border shopping) and the relevant tax structure.
3.5.1. In almost all OECD countries, heating fuel oil is taxed at lower rates than motor fuels
Annex Table 3.A.6 shows that almost all OECD countries tax heating fuel oil at lower rates than motor fuels, including automotive diesel, which is technically the same product. In the European Union, a minimum rate is established by the Energy Tax Directive for heating fuel (EUR 0.021/litre), which is much lower than the rate for motor fuel (EUR 0.3/litre of diesel). Only Israel applies the same excise rate to both heating fuel oil and automotive diesel. The Netherlands applies a higher excise rate to heating oil than automotive diesel (see Annex Table 4.A.5).
The large differences in the excise duty rates are reflected in the wide variation in heating oil consumer prices across the OECD, ranging from USD 1.070/litre in Lithuania and 1.075/litre in Belgium to USD 1.958/litre in Denmark and USD 1.855/litre in Israel.
All OECD countries apply the standard VAT rate to heating fuel oil, except Ireland, Luxembourg and the United Kingdom (by contrast, none of the OECD countries applies a reduced VAT rate to automotive diesel or gasoline).
Four OECD countries (Hungary, Netherlands, Poland and Slovenia) reported a temporary reduction of their excise rates on heating fuel oil in the course of the year 2022 to counter rising energy costs (see country notes to Annex Table 3.A.6).
References
[3] Colin Angus, J. (2019), “Comparing alcohol taxation throughout the European Union”, Addiction notes.
[5] Federation of Tax Administrators (2022), State excise tax rates on cigarettes.
[1] Keen, M. (1998), “The Balance between Specific and Ad Valorem Taxation”, Fiscal Studies, Vol. 19/1, pp. 1-37, https://doi.org/10.1111/j.1475-5890.1998.tb00274.x.
[4] World Health Organisation (2021), WHO Technical manual on tobacco tax policy and administration, WHO, Geneva.
[6] World Health Organization (2021), WHO report on the global tobacco epidemic 2021 web annex IX, https://apps.who.int/iris/handle/10665/343468.
[2] World Health Organization (2010), Global strategy to reduce the harmful use of alcohol, World Health Organisation.
Australia. The excise rates for beer in individual containers of less than 8 litres; or individual containers of at least 8 litres but not exceeding 48 litres and not designed to connect to a pressurised gas delivery system or pump delivery system are: AUD 45.07 per litre of alcohol where the alcohol volume does not exceed 3%, AUD 52.49 where the alcohol volume exceeds 3% but does not exceed 3.5%, and AUD 52.49 where the alcohol volume exceeds 3.5%. The excise rates for beer in individual containers exceeding 48 litres; or individual containers of at least 8 litres but not exceeding 48 litres and designed to connect to a pressurised gas delivery system or pump delivery system are: AUD 9.01 per litre of alcohol where the alcohol volume does not exceed 3%, AUD 28.23 where the alcohol volume exceeds 3% but does not exceed 3.5%, and AUD 36.98 where the alcohol volume exceeds 3.5%. Lower rates also apply for beer produced for non-commercial purposes using commercial facilities or equipment, being AUD 3.17 per litre of alcohol for beer where the alcohol volume does not exceed 3% and 3.65 per litre of alcohol for beer where the alcohol volume is over 3%. Excise duty on beer is calculated on the amount by which the alcohol content exceeds 1.15% by volume of alcohol. Beer that does not contain more than 1.15% by volume of alcohol is not subject to excise duty. These rates are indexed to inflation in February and August each year. Eligible manufacturers can receive a remission (i.e. not required to pay) of 100% of the excise duty payable up to a maximum of AUD 350 000 per financial year.
Austria. Beer with an alcoholic content less than 0.5 % vol. is free of excise (see European Union country note below).
Belgium. Beer with an alcoholic content less than 0.5 % vol. is free of excise (see European Union country note below).
Canada. Excise duty rates for beer are imposed per hectolitre of product (not per hectolitre per degree alcohol). As of 1 January 2022 federal excise duty rates, on all beer or malt liquor containing: (1) more than 2.5% abv, CAD 34.00 per hectolitre; (2) more than 1.2% abv but not more than 2.5% abv, CAD 17.00 per hectolitre; (3) not more than 1.2% abv, CAD 2.822 per hectolitre. Reduced rates of excise duty apply on the first 75 000 hectolitres of beer and malt liquor brewed in Canada per year by licensed brewers: the aforementioned rates are reduced by (1) 90%, on the first 2 000 hectolitres, (2) 80%, on the next 3 000 hectolitres, (3) 60%, on the next 10 000 hectolitres, (4) 30%, on the next 35 000 hectolitres, and (4) 15%, on the next 25 000 hectolitres. Automatic inflationary adjustments on duty rates for beer occur annually on April 1. The most recent inflationary adjustments took effect on 1 April 2022. Provincial and territorial governments also charge taxes and mark-ups on beer.
Chile. The sale of alcoholic beverages (including wine, beer, distilled alcoholic beverages and other alcoholic beverages) is subject to 19% VAT and also to a surtax on the sale or import of alcoholic beverages. The rate applied to beer is 20.5% and does not depend upon the degree of alcohol that the beer contains. The tax is applied to the VAT base, that is the sale`s price (excluding VAT itself) and is levied on sales between wholesale dealers. For sales between wholesalers, the tax paid to the vendor is creditable against the tax applied on sales at each stage of the value chain (including imports) until the last sale to the final retailer. The sale from the retailer to the final consumer is not subject to the surtax and the retailer cannot deduct the input tax.
Colombia. The beer consumption tax is a national tax, collected by the territories (“Departmentos”) on the products consumed in their territory. National and imported beers are subject to the consumption tax of 48% on the retail price without taxes. That price does not include the value of packages and bottles. It is a single-stage tax payed at the moment of import or exit of factory. The mix of beer with non-alcoholic beverages (refajos) is levied at 20%. Non-alcoholic beer (with an alcoholic content less than 2.5% vol.) is not subject to tax.
Costa Rica. There is a specific tax for each millilitre of absolute alcohol contained in any domestically produced or imported alcoholic beverage, regardless of its presentation, according to the concentration of alcohol by volume. Tax rates are defined by law and quarterly updated according to the variation of the consumer price index. Tax rates vary according the abv for each liquor and beer following these ranges: from 0 up to 15%, between 15% and up to 30%, and above 30%.
Czech Republic. Beer with an alcoholic content less than 0.5% vol. is free of excise (see European Union country note below).
Denmark. Lower rates on small independent breweries: production ≤ 3 700 hl excise duty reduced by 50 percent. Production > 3 700 but ≤ 20 000 hl excise duty reduced by a percentage that equals to 168 607 divided by the produced amount in hl plus 4.43. Production > 20 000 but ≤ 200 000 hl the excise duty is reduced by a percentage that equals to 14.29 minus produced amount in hl divided by 14 003. Beer with alcohol content less than 2.8% vol. is free of excise tax.
Estonia. Beer with an alcoholic content less than 0.5% vol. is free of excise (see European Union country note below).
Finland. Beer with an alcoholic content less than 0.5% vol. is free of excise (see European Union country note below). The excise rate for beer with an alcoholic content 0.5-3.5% vol. is 24.75 per hectolitre per % abv. Similar reductions for small breweries as for beer with alcoholic content more than 3.5% vol.: the aforementioned rate is reduced by 50%, on the first 5 000 hectolitres, 30%, on the next 25 000 hectolitres, 20%, on the next 25 000 hectolitres and 10%, on the next 45 000 hectolitres. Small breweries with maximum production of 200 000 hectolitres are entitled to the reduced rates.
France. Beer with alcoholic content above 18% subject to an additional tax to support the social budget: EUR 48.97 per hectolitre. Beer with an alcoholic content less than 0.5 % vol. is free of excise (see European Union country note below).
Germany. Beer with an alcoholic content less than 0.5% vol. is free of excise (see European Union country note below).
Greece. Beer with an alcoholic content less than 0.5 % vol. is free of excise (see European Union country note below).
Hungary. Beer with an alcoholic content less than 0.5% vol. is free of excise (see European Union country note below). Flavoured beers are subject to a HUF 25/litre public health product tax.
Iceland. The duty in Iceland is ISK 132 per centilitre of alcohol per litre minus 2.25 centilitres. For example, one litre of beer that has 6% abv has 6 centilitres alcohol per litre. Therefore, the duty for one litre of beer that contains 6% abv would be as follows: (6-2.25) * 132 = ISK 495 per litre. As a result of this formula, beer with less than 2.25% abv is not taxed.
Ireland. There is remission or repayment of 50% alcohol products tax (excise duty) on beer brewed in independent small breweries producing up to 50 000 hl a year. Budget 2020 increased the qualifying production level from 40 000 to 50 000 hectolitres but maintained the current 30 000 hectolitre limit for remission/repayment of APT. For low alcohol beer, the rate is 0.00 (beer ≤ 1.2% abv) and EUR 11.27 (beer > 1.2% abv up to 2.8% abv). Beer with an alcoholic content less than 0.5 % vol. is free of excise (see European Union country note below).
Israel. The duty was set as ILS 240 on 1 January 2022. The amount is updated each year according to the change in the Consumer Price Index (CPI). There is no duty on beer under 2% alcohol (or under 3.8% alcohol if marketed in reusable bottles).
Italy. The standard rate of excise duty, i.e. EUR 2.94 per hectolitre and per degree Plato, as well as the planned reductions for small independent breweries specified below, are valid for the year 2022 only. With regard to small independent breweries with annual production not exceeding 10 000 hectolitres, the excise rate is reduced by 50 percent (in comparison to the standard rate). For small breweries with annual production exceeding 10 000 hectolitres and up to 30 000 hectolitres, the excise rate is reduced by 30 percent. For small breweries with annual production exceeding 30 000 hectolitres and up to 60 000 hectolitres, the excise rate is reduced by 20 percent. Beer with actual alcoholic strength not exceeding 0.5 percent by volume is not subject to excise duty.
Japan. Excise rates are JPY 20 000 per hl of product. Reduced rates for small brewers (the production of liquor in previous year shall be up to 100 000 hl) apply for the first 2 000 hl of beer per year at the following rates: (a) if the production of beer in previous year is less than or equal to 10 000 hl, 85% of the normal rate; (b) if the production of beer in previous year is more than 10 000 hl but less than or equal to 13 000 hl, 92.5% of the normal rate (temporary measure). Reference information (FY2017 Liquor tax reform). From 1 October 2020, the excise rates for liquor were changed in order to restore fairness in tax burden between different types of beer. Specifically, the excise rates for beer and beer-like liquors will be unified at JPY 15 500 per hl in October 2026 (the revision will be implemented in three stages).
Korea. The tax rate of beer is KRW 830.300 per kilolitre (as for beer sold in the container sized 8 litre or bigger that uses a separate dispensing tap before December 31, 2021, KRW 664.200 of tax rate applied). Each year, the beer tax rate is determined in accordance with the changes in the consumer price index. From 1 April 2022, the tax rate of beer is KRW 855.200 per kilolitre (as for beer sold in the container sized 8 litre or bigger that uses a separate dispensing tap before 31 December 2023, KRW 684.100 of tax rate applied).
Latvia. Starting from 1 March 2021 the excise per hectolitre per % abv is EUR 8.20; excise per hectolitre per % abv for small independent breweries is EUR 4.1 (not less than EUR 15.2 per hectolitre of beer). The reduced rate for small independent breweries (annual production up to 50 000 hl) is applied for the first produced 10 000 hl of beer. Beer with an alcoholic content less than 0.5% vol. is free of excise (see European Union country note below).
Lithuania. Starting from 1 January 2022 the reduced rate is applied for small independent breweries (annual production up to 80 000 hl) for the first produced 10 000 hl of beer. Beer with an alcoholic content less than 0.5 % vol. is free of excise (see European Union country note below).
Luxembourg. Rates for small breweries (annual production up to 200 000 hl) range from EUR 0.40 to EUR 0.45. Additional rate for alcopops: EUR 600 per hectolitre. Beer with an alcoholic content less than 0.5 % vol. is free of excise (see European Union country note below).
Mexico. The rates apply to the value of the goods as follows: 26.5% for beer and other alcoholic beverages up to 14° Gay-Lussac (GL); 30% for beverages above 14° G.L. and up to 20° G.L.; 53% for beverages above 20° G.L.
Netherlands. Excise duty rates are as follows per hectolitre of product: a) up to 7° Plato (approx. 2,8 % abv) EUR 8.83; b) 7°-11° Plato (approx. 2,8 – 4,4 % abv) EUR 28.49; c) 11°-15° Plato (approx. 4,4 – 6 % abv) EUR 37.96; d) 15 or more degrees Plato (approx. 6 % abv or more) EUR 47.48. Rates for small breweries (annual production up to 200 000 hl) are as follows: a) up to 7° Plato the above mentioned rate; b) 7°-11° Plato EUR 26.35; c) 11-15 degrees Plato EUR 35.11; d) 15 or more degrees Plato EUR 43.92. For beer with a maximum alcohol content of 0.5%, a consumer tax of EUR 8.83 per hectolitre is applicable and a VAT rate of 9%. Beer with an alcoholic content less than 0.5% vol. is free of excise (see European Union country note below).
New Zealand. The excise rate for beer containing more than 2.5% abv is NZD 29.054 per litre of alcohol in finished product. The rate for beer containing more than 1.15% abv but not more than 2.5% abv is NZD 0.43573 per litre of product. There is no excise duty on beer containing less than 1.15% abv.
Norway. Excise rates are as follows per hectolitre of product: a) 0.0-0.7% abv: NOK 0; b) 0.7-2.7% abv: NOK 331; c) 2.7 - 3.7% abv: NOK 1 244; d) 3.7-4.7% abv: NOK 2 155. The excise rate for beer with an alcoholic content of more than 4.7% abv is NOK 482 per degree of alcohol and hectolitre.
Poland. Exemptions from excise for small breweries: 1) production ≤ 200 000 hl a year: – 50% of the amount of excise duty calculated with the standard rate of excise duty on beer; the above rules also apply to producers who cooperate with each other; 2) intra-Community purchase or import of beer by entities that meet the conditions specified in law: – 50% of the amount of excise duty calculated with the standard rate of excise duty on beer. Beer with an alcoholic content less than 0.5 % vol. is free of excise (see European Union country note below).
Portugal. Excise rates for beer are as follows per hectolitre of product: (a) >0.5. ≤ 1.2% abv EUR 8.34; (b) >1.2 ≤2.8% abv EUR 10.44; (c) > 2.8 ≤ 4.4% abv EUR 16.70; (d) > 4.4 ≤ 5.2% abv EUR 20.89; (e) > 5.2 ≤ 6% abv EUR 25.06; (f) >6% abv EUR 29.30 (rates as at 01 January 2022). Rates for small breweries (annual production up to 200 000 hl) are 50% of the normal rates. Beer with an alcoholic content less than 0.5 % vol. is free of excise (see European Union country note below).
Slovak Republic. Beer with an alcoholic content less than 0.5% vol. is free of excise (see European Union country note below).
Slovenia. Reduced rate for small breweries (yearly production ≤ 20 000 hl): EUR 6.05 per hl per % abv. Exemption for natural persons if yearly production is less than 500 l. Reduced rate for small breweries (yearly production ≤ 20 000 hl) is 50% of the standard rate of excise duty for beer: EUR 6.05. Beer with an alcoholic content less than 0.5% vol. is free of excise (see European Union country note below).
Spain. Excise rate according to strength is: beer with less than 1.2% abv is free of excise; beer between 1.2% and 2.8% abv is EUR 2.75/hl; beer with more than 2.8% abv and 4.4% abv is EUR 7.48/hl; beer with more than 4.4% abv and 6%abv is EUR 9.96/hl; beer with more than 6%abv and 7.6%abv is EUR 13.56/hl; beer with more than 7.6%abv is EUR 0.91/hl and per degree Plato. There is no tax on beer in Ceuta and Melilla (Spanish cities situated in the North of Africa).
Sweden. The excise duty for beer with an alcoholic content below 2.8% abv is SEK 0.
Switzerland. Rates per hectolitre: light beer (up to 10.0° Plato): CHF 16.88; regular and special beer (10.1 to 14.0° Plato): CHF 25.32; strong beer (from 14.1° Plato): CHF 33.76. For small breweries producing less than 55 000hl per year the tax rate is progressively reduced according to the volume of production up to 40% reduction (annual production of max. 15 000 hl). Beer with more than 15 % vol. alcohol is taxed as an alcoholic beverage (CHF 2900 per hectolitre of absolute alcohol). Beer with an alcoholic content of less than 0.5% vol. is free of excise.
Türkiye. The minimum tax amount is TL 352.77per hectolitre/degree. If the amount computed according to the tax rate (63%) is lower than the minimum tax amount, the minimum tax amount is due.
United Kingdom. Beer with an alcoholic content below 1.2% abv is free of excise duty. Lower strength beer duty applies to beer with a strength between 1.2% to 2.8% abv. High strength beer duty was introduced on 1 October 2011 and is a duty applied to all beer exceeding 7.5% abv. It is charged in addition to general beer duty.
Reduced duty rates apply for independent breweries making ‘Small Brewery Beer’. The rates are as follows;
producing no more than 5 000 hl: 50% of the standard duty rate of duty
producing more than 5 000 hl but no more than 30 000 hl – duty is calculated using the formula: Annual production minus 2500 /annual production x standard rate of duty
producing more than 30 000 hl but no more than 60 000 hl – duty is calculated using the formula: Annual production minus (2500 minus 8.33% of annual production in excess of 30 000 hl)/annual production x standard rate of duty
Breweries making ‘Small Brewery Beer’ cannot claim a reduction in the rate of lower strength beer duty.
United States. The weighted average Federal and State excise tax rate is USD 20 per hectolitre of product. The Federal tax is USD 16.00 per barrel (31 gallons) for the first 6 million barrels of beer and then USD 18.00 per barrel for each barrel after. 1 barrel = 1.1735 hectolitres. Small domestic brewers who produce less than 2 million barrels of beer per calendar year pay USD 3.50 in federal tax per barrel on the first 60 000 barrels and then USD 16.00 for each barrel over 60 000. There is no progressive rate structure based on alcohol content and no federal VAT.
European Union. According to Directive 92/83/EEC as amended by Council Directive 2020/1151, beer with an alcoholic content less than 0.5% abv. is not a beer and is not subject to excise duty in the EU.
Australia. All wine (which includes grape wine, grape wine products, fruit or vegetable wine, cider or perry, mead and sake – subject to specific definitions) is generally subject to the wine equalisation tax (WET). WET applies at 29% of the wholesale value of the wine, and generally only applies when an entity is registered or required to be registered for goods and services tax (GST). The WET producer rebate, calculated as the amount of WET paid, or the amount of WET that would have been paid had the purchaser not quoted, applies to eligible producers in certain circumstances, up to a maximum of AUD 350 000 per financial year.
Belgium. Low alcohol still and sparkling wine is wine with alcohol content with 8.5%abv or less.
Canada. (1) As of January 1, 2022, a rate of CAD 0.672 per litre applies to wine with more than 7% abv; the rate was CAD 0.322 per litre on wine of more than 1.2% abv, but not more than 7% abv; and for all wine with 1.2% abv or less the rate was CAD 0.021 per litre. (2) Fortified wine in excess of 22.9% abv would not be included in the definition of "wine" (and, therefore, fall within the definition of "spirits"). Automatic inflationary adjustments on duty rates for wine occur annually on April 1. The most recent inflationary adjustments took effect on April 1, 2022. Provincial and territorial governments also charge taxes and mark-ups on wine.
Chile. The sale of alcoholic beverages is subject to a surtax of 20.5% on the sale or import of wine, sparkling wine, champagne, cider and other alcoholic beverages (among others). The tax is applied to the VAT base, that is the sale`s price (excluding VAT itself), and is levied on sales made between wholesale dealers. For sales between wholesalers, the tax paid to the vendor is creditable against the tax applied on sales at each stage of the value chain (including imports) until the last sale to the final retailer. The sale from the retailer to the final consumer is not subject to this surtax and the retailer cannot deduct the input tax; nor is it levied with this tax the sale of wine in bulk made by producers to a taxpayer seller subject to this surtax.
Colombia. Alcoholic beverages are subject to a 5% VAT. Wines and wine aperitifs, imported and national, are subject to the consumption tax with two components: a component ad valorem at 20% of the retail price (excluding taxes) and a specific component at COP 178 per grade of alcohol in a bottle of 750cc (value for year 2022). This specific component is equivalent to COP 237.33 per degree of alcohol in each litre, that is, COP 2 373 333 per hectolitre of pure alcohol. It is a monophasic tax payed at moment of import or exit of factory. There are no different rates for types of wine.
Costa Rica. There is a specific tax for each millilitre of absolute alcohol contained in any domestically produced or imported alcoholic beverage, regardless of its presentation, according to the concentration of alcohol by volume. Tax rates are defined by law and quarterly updated according to the variation of the consumer price index.
Denmark. The rate for high-alcohol wine > 15 % abv – maximum 22 % abv is DKK 1 508 per hectolitre. Medium-alcohol wine > 6% abv – maximum 15 % abv is DKK 1 126 per hectolitre. Low-alcohol wine > 1.2 % abv – maximum 6 % abv is DKK 518 per hectolitre. The rates for sparkling wine correspond to the rates for still wine plus DKK 335 per hectolitre.
Estonia. Wine with an alcoholic content up to 6% abv is low alcohol wine.
Finland. Wine and other fermented beverages are taxed as follows: >1.2 but not exceeding 2.8 % abv EUR 36.00/hl; >2.8 % but not exceeding 5.5 % abv EUR 198.00/hl; >5.5 % abv but not exceeding 8 % abv EUR 287.00/hl; >8 % abv EUR 421.00/hl.
France. A reduced rate of EUR 1.34/hl applies to the following categories of low-alcohol wine: cider, perry, mead, grapes juice lightly sparking.
Germany. Excise rate for sparkling wine is EUR 136.00/hl. Excise rate for low alcohol sparkling wine < 6 % abv is EUR 51.00. Intermediate products with a volume of alcoholic degree between 1.2 % and 22 % abv are taxed according to the following rates: > 15 % abv - 22 % abv = EUR 153/hl; <= 15 % abv = EUR 102/hl; <= 15 % abv and sparkling = EUR 136/hl. Wine is not subject to an excise duty. Nevertheless, wine is subject to excise duty supervision in the German tax territory.
Hungary. The rates for other fermented beverages (mostly fruit wines) are as follows: a) still: HUF 9870 per hectolitre of product, b) sparkling: HUF 16460 per hectolitre of product. c) low alcohol: HUF 0 per hectolitre of still blend of more than 50% wine and sparkling mineral water without added flavouring and not exceeding 8.5% vol. The rate for intermediate products is HUF 25520 per hectolitre of product.
Iceland. The duty rate is ISK 120.25 per centilitre of alcohol per litre minus 2.25 centilitres for wine up to 15% abv. For example, one litre of wine that has 15% abv has 15 centilitres alcohol per litre. The duty for one litre of wine that contains 15% abv would be as follows: (15-2.25) * 120.25 = ISK 1533.2 per litre.
Ireland. The rate for low alcohol wine applies to wine with an alcoholic content not exceeding 5.5% abv. The rate for still wine with alcoholic content > 15% abv is EUR 616.45. The rate for still wine exceeding 5.5% vol but not exceeding 15% volume is EUR 424.84.
Japan. From 1 October 2020, the excise rate is JPY 9000 per hl.
Korea. The rate of liquor tax on wine is 30% on the manufacturer’s price (or imported price). In addition, Education Tax (10% of the amount of Liquor tax levied) is also levied. These rates are applicable to both still and sparkling wine regardless of alcohol content.
Latvia. Excise for wine (still and sparkling) is EUR 111 per hectolitre. There is no specific rate for low-alcohol (still) wine (<8.5% abv).
Lithuania. Low-alcohol wine covers still and sparkling wine < 8.5% abv.
Luxembourg. The reduced VAT rate (14%) applies to still wine with alcoholic content ≤ 13% abv. Additional rate for alcopops: EUR 600 per hectolitre.
Mexico. All rates apply to the value of the goods, and not per hectolitre of product, as follows: 26.5% for beer and other alcoholic beverages up to 14° Gay-Lussac (GL); 30% for beverages above 14° G.L. and up to 20° G.L.; 53% for beverages above 20° G.L.
Netherlands. For low alcohol wine < 1.2% abv the VAT rate is 9%.
Norway. The rate shown in the table is the rate for wine with an alcoholic content of 12% abv. Excise rates for wine with an alcoholic content of 4.7%-22% abv = NOK 482 per vol. pct. alcohol and per hectolitre.
Poland. Exemptions from excise for small wine producers: (1) production ≤ 1 000 hl a year: – 50% of the amount of excise duty calculated with the standard rate of excise duty on wine holding an annual certificate confirming total annual production issued by the competent head of the revenue office; the above rules also apply to producers who cooperate with each other. (2) intra-Community purchase or import of wine by entities that meet the conditions specified in law: – 50% of the amount of excise duty calculated with the standard rate of excise duty on wine.
Slovak Republic. The rate of EUR 54.16/hl applies to sparkling wine with an alcoholic strength by volume not exceeding 8.5 % abv. The rate for intermediate products is EUR 84.24/hl.
Spain. Intermediate products - products to which distilled alcohol has been added - and with a volume of alcoholic degree between 1.2% abv and less than 22% abv are taxed according to the following rates: alcoholic degree > 1.2% abv and less than 15% abv = EUR 338.48/hl. Others = EUR 64.13/hl (in the Canary Islands rates are 30.14% and 50.21% respectively).
Sweden. Excise rates for alcohol wine (still and sparkling) are as follows: a) < 2.25%abv SEK 0; b) 2.25%-4.5% abv SEK 919; c) 4.5%-7% abv SEK 1358; d) 7%-8.5% abv SEK 1869; e) 8,5-15% abv SEK 2618; f) 15,0-18,0% abv SEK 5479.
Switzerland. In general natural wines made from fresh grapes with more than 18% abv and other wines with more than 15% abv are taxed as an alcoholic beverage (CHF 1 450 per hectolitre of absolute alcohol). All wines with more than 22% abv are taxed as an alcoholic beverage (CHF 2 900 per hectolitre of absolute alcohol).
United Kingdom. Reduced rates for lower strength drinks (wine categories – wine and made-wine) are as follows: (a) exceeding 1.2% but not exceeding 4% abv = GBP 91.68; (b) exceeding 4% but not exceeding 5.5% abv = GBP 126.08; (c) low strength sparkling wine and made-wine exceeding 5.5% but less than 8.5% abv = GBP 288.10; (d) sparkling wine and made-wine at least 8.5% abv but not exceeding 15% abv = GBP 381.15. Rate for the band exceeding 15% abv but not exceeding 22% abv = GBP 396.72. The duty rates on wine and made-wine changed on 1 February 2019 to excise duty rate on still wine and made-wine 297.57.
United States. The weighted average Federal and State excise tax rate is USD 38 per hectolitre of product for still wine up to 16% abv and USD 105 for sparkling wine. The Federal excise rates are as follows: a) up to 16% abv: USD 0.07 per gallon for the first 30 000 wine gallons. USD 0.17 for each wine gallon over 30 000 up to 130 000. USD 0.535 for each wine gallon over 130 000 up to 750 000. USD 1.07 per gallon over 750 000 gallons. b) 16%-21% abv: USD 0.57 per gallon for the first 30 000 wine gallons. USD 0.67 for each wine gallon over 30 000 up to 130 000. USD 1.035 for each wine gallon over 130 000 up to 750 000 gallons. USD 1.57 per gallon over 750 000 gallons. c) 21%-24% abv: USD 2.15 for the first 30 000 wine gallons. USD 2.25 for each wine gallon over 30 000 up to 130 000. USD 2.615 for each wine gallon over 130 000 up to 750 000. USD 3.15 per gallon over 750 000 gallons. d) Artificially carbonated wine: USD 2.30 for the first 30 000 gallons. USD 2.40 for each gallon over 30 000 up to 130 000. USD 2.765 for each gallon over 130 000 up to 750 000. USD 3.30 per gallon over 750 000 gallons. e) Sparkling wine: USD 2.40 for the first 30 000 gallons, USD 2.50 for each gallon over 30 000 up to 130 000, USD 2.865 for each gallon over 130 000 up to 750 000, and USD 3.40 per gallon over 750 000 gallons. 26.42 US gallons = 1 hectolitre. There is no Federal VAT.
Australia. The excise duty of AUD 88.91 per litre of alcohol applies to excisable beverages (except beer and wine, where wine includes perry, mead and sake) where the alcohol content is greater than 1.15% abv. A lower rate of AUD 83.04 per litre of alcohol applies to brandy (distilled from grape wine). These rates are indexed to inflation in February and August of each year. Eligible distillers can receive a remission (i.e. not required to pay) of 100% of the excise duty payable up to a maximum of AUD 350 000 per financial year.
Austria. For small distilleries producing not more than 4hl pure alcohol per year the rate is EUR 648 (54% of the standard rate).
Belgium. Other fermented beverages are taxed per hectolitre of product. In analogy to the category “wine”, the following excise rates apply: EUR 74.91 for still fermented beverages, EUR 256.32 for sparkling fermented beverages and a reduced excise rate of 23.91 EUR for low-alcohol fermented beverages (≤ 8.5 % abv).
Canada. As of 1 January 2022, spirits were subject to excise duty at the rate of CAD 12.736 per litre abv; spirits containing not more than 7% abv were subject to excise duty at the rate of CAD 0.322 per litre. (2) Beer with an alcoholic strength in excess of 11.9% abv and fortified wine with an alcoholic strength in excess of 22.9% abv are deemed to be spirits. Automatic inflationary adjustments on duty rates for alcoholic beverages occur annually on April 1. The most recent inflationary adjustments took effect on April 1, 2022. Provincial and territorial governments also charge taxes and mark-ups on spirits. Beverages falling under the category “Other fermented beverages” are generally considered wine for tax purposes.
Chile. Alcoholic beverages are subject to a surtax on the sale or import. The rates applied are the following: 31.5% on liquors, brandy, vermouth, pisco, whiskey and other distilled alcoholic beverages; 20.5% on beer, wine, sparkling wine, champagne, cider and other alcoholic beverages. The tax is applied to the VAT base, that is the sale`s price (excluding VAT itself) and is levied on sales made between wholesale dealers. For sales between wholesalers, the tax paid to the vendor is creditable against the tax applied on sales at each stage of the value chain (including imports) until the last sale to the final retailer. The sale from this retailer to the final consumer is not subject to the surtax and the retailer cannot deduct the input tax nor is levied with this tax the sale of wine in bulk made by producers to a taxpayer seller subject to this surtax.
Colombia. Alcoholic beverages are subject to a 5% VAT. Imported and national alcoholic beverages are subject to a consumption tax of 25% of the retail price (excluding taxes) and COP 262 per grade of alcohol in a bottle of 750cc (Value for year 2022). This specific component is equivalent to COP 349.33 per degree of alcohol in each litre, that is, COP 3 493 333.33 per hectolitre of pure alcohol. It is a monophasic tax payed at moment of import or exit of factory. As a rule, a territory (“Departamento”) must use the same taxable bases and the same rates that apply to the consumption tax, both in its specific component and in its ad valorem component. However, since it is a liquor monopoly, the territory can increase the rates in the two components (specific and ad valorem) or in only one of them. Currently only one territory (Nariño) increased the rate in the specific component, in the other territories the same rates of consumption tax are applied. The introduction of distilled liquors to a territory with monopoly is levied with introduction rights (“Derechos de introducción”) of 2% of annual sales. Undenatured ethyl alcohol destined for the manufacture of liquors may be subject to a monopoly by the territories. In this case, between COP 133 and COP 524 must be paid per litre to the final territory, as defined by the respective territorial authority (Asamblea).
Costa Rica. There is a specific tax for each millilitre of absolute alcohol contained in any domestically produced or imported alcoholic beverage, regardless of its presentation, according to the concentration of alcohol by volume. The law sets the tax rates, which are updated quarterly according to the variation of the consumer price index to the consumer by trimestral period. Liquor: Tax rates varies according the abv for each liquor and beer following these ranges: from 0 up to 15%, between 15% and up to 30%, and above 30 %. Beer and similar: between 15% and 30%.
Czech Republic. The reduced rate of CZK 16 200 per hectolitre of pure alcohol applies for small fruit grower's distilleries producing no more than 30 litres of pure alcohol in fruit spirit per year per household. The excise duty of CZK 2 340 per hectolitre of product is applicable for intermediate products (products containing more than 1.2% and less than 22 % of ethanol). Excise tax applied on other fermented beverages is set at the same level as the tax rate on sparkling wine.
Denmark. The spirit rate also applies to spirit drinks with more than 1.2% alcohol as well as wine and fruit-wine with more than 22% alcohol. Small producers (≤ 10 hl annually) have the rate reduced by 50%. Other fermented beverages as defined under WCO customs code 2206 are taxed as wine, see Table 3.2.
Estonia. Excise duty rate on other fermented beverage is 147.82 EUR per hectolitre of product. Excise duty rate on low alcohol other fermented beverage (up to 6%vol) is 63.35 EUR per hectolitre.
Finland. Excise rates are as follows: (a) CN - code 2208 alcoholic content between 1.2% abv and 2.8% abv.: EUR 3 090 per hectolitre of absolute alcohol; (b) Other products: EUR 5 035 per hectolitre of absolute alcohol. Other fermented beverages are taxed as follows: >1.2 but not exceeding 2.8 % abv: EUR 36.00/hl; >2.8 % but not exceeding 5.5 % abv: EUR 198.00/hl; >5.5 % abv but not exceeding 8 % abv: EUR 287.00/hl; >8 % abv EUR 421.00/hl. Intermediate beverages are taxed as follows: >1.2 but not exceeding 15 % abv: EUR 501.00/hl; >15.00 % but not exceeding 22 % abv: EUR 771.00/hl.
France. Additional taxation for social budget: EUR 578.80 per hectolitre of absolute alcohol.
Germany. (1) The rates for small distilleries are EUR 730 or EUR 1 022. (2) Additional rate for alcopops: EUR 5 550 per hectolitre of absolute alcohol.
Greece. The rate for ouzo and tsipouro / tsikoudia is EUR 1 225 per hectolitre of pure alcohol. The rate for traditional distillate from fruits supplied from the household of the producer, which are distilled in simple copper traditional distilling devices with a capacity of up to 130 litres, is EUR 370per hectolitre of pure alcohol. The rate for other fermented beverages is EUR 20 per hectolitre of final product.
Hungary. A reduced excise rate of 0% applies to ethyl-alcohol produced by fruit growers' distilleries from fruit supplied to them by private fruit growers. The application of reduced rate is limited to 43 litres of pure alcohol for private consumption per fruit grower household per year. The product with reduced rate should not be placed on the market, it is used by the household for its own consumption.
The excise duty rate for other fermented beverages is HUF 9 870/hectolitre of still product and HUF 16 460/hectolitre of sparkling product. The excise duty rate for intermediate products is HUF 25 520/hectolitre of product (definition of intermediate product is in Article 17 of Directive 92/83/EEC).
Undenatured ethyl alcohol is also subject to the public health product tax until 30 June 2022. From 1 July 2022, the public health product tax is incorporated into the excise duty:
a) If its alcohol content is more than 1.2 per cent by volume, but not less than 5 per cent by volume, HUF 25/litre,
b) If its alcohol content is 5 per cent by volume or more, but not less than 15 per cent by volume, HUF 120/litre,
c) If its alcohol content is 15 per cent by volume or more, but not less than 25 per cent by volume, HUF 360/litre,
d) If its alcohol content is 25 per cent by volume or more, but not less than 35 per cent by volume, HUF 600/litre,
e) If its alcohol content is 35 per cent by volume or more, but not less than 45 per cent by volume, HUF 850/litre,
f) If its alcohol content is 45 per cent by volume or more, 1100 HUF/litre.
Ready-to-drinks are subject to a HUF 25/litre public health product tax.
Iceland. Excise rate shown in the table is the rate for other alcohol than beer or wine up to 15% abv. The rate is ISK 162.7 per each centilitre of alcohol.
Ireland. This table illustrates the tax per hectolitre of absolute alcohol for spirits. However, other fermented beverages and intermediate beverages are taxed as follows: other fermented beverages (cider and perry) still and sparkling ≤ 2.8% abv: EUR 47.23/hl. Still and sparkling > 2.8% abv but not exceeding 6.0% abv: EUR 94.46/hl. Still and sparkling >6.0% abv but not exceeding 8.5% abv: EUR 218.44/hl. Still >8.5% abv: EUR 309.84/hl and sparkling >8.5% abv: EUR 619.70/hl. Other fermented beverages (other than cider and perry) still and sparkling ≤ 5.5% abv: EUR 141.57/hl; still >5.5% abv: EUR 424.84/hl and sparkling >5.5% abv: EUR 849.68/hl. Intermediate beverages: still ≤ 15% abv: EUR 424.84/hl; still >15% abv: EUR 616.45/hl; sparkling: EUR 849.68/hl.
Italy. An excise duty rate of EUR 88.67/hectolitre of finished product is applied to intermediate products, i.e. to all alcoholic beverages falling under CN codes 2204, 2205 and 2206 other than beer, wine and other fermented beverages, having an actual alcoholic strength exceeding 1.2 percent by volume but not 22 percent by volume. Intermediate products are also any other still fermented beverages with actual alcoholic strength exceeding 5.5 percent by volume and not entirely obtained by fermentation, as well as any sparkling fermented beverage with actual alcoholic strength exceeding 8.5 percent by volume and not entirely obtained by fermentation.
Japan. Excise rates are as follows (per hectolitre): a) whiskey and brandy (40% abv) JPY 40 000; b) spirits (37% abv) JPY 37 000; c) shochu Group A and B (25% abv) JPY 25 000; d) Sake JPY 11 000. Of the above, reduced rates for small producer of shochu Group A, B and sake (the production of liquor in previous year shall be up to 100 000 hl) apply for the first 2 000 hl of shochu. Group A, B or sake per year at the following rates: (1) if the production of shochu Group A, B or sake in previous year is less than or equal to 10 000 hl, 80% of the normal rates; (2) if the production of shochu Group A, B or sake in previous year is more than 10 000 hl but less than or equal to 13 000 hl, 90% of the normal rates (temporary measure).
Korea. As Excise Tax for liquor is based on the value of the product, the rate does not vary with alcohol content. For whiskey, brandy, general distilled spirits, liquor, diluted soju and distilled soju, the Liquor tax is 72% and the Education tax is 30%.
Latvia. Starting from 1 March 2021 the excise rate is EUR 1724 per hectolitre of absolute alcohol. The reduced excise rate for ethyl alcohol produced by small distillery (not more than 10 hl of absolute alcohol) is applied since 1 March 2019. Starting from 1 March 2021 the reduced rate is EUR 862 per hectolitre of absolute alcohol. Starting from 1 July 2022 the reduced excise rate (50% of standard rate) for fermented beverages produced by small producer (not more than 150 hl) or medium producer (not more than 1500 hl) is applied depending on alcoholic strength: not exceeding 6% abv – EUR 32 per hectolitre of fermented beverages; exceeding 6% abv – EUR 55 per hectolitre of fermented beverages.
Lithuania. Other fermented beverages below 8.5% abv are taxed at EUR 78 per hectolitre of product; other fermented beverages above 8.5% abv are taxed at EUR 181 per hectolitre of product. Starting from 1 January 2022, intermediate products below 15% abv are taxed at 200.00 per hectolitre of product; intermediate products above 15% abv are taxed at 285.00 per hectolitre of product.
Luxembourg. Additional rate for alcopops: EUR 600 per hectolitre.
Mexico. The excise tax is set at an ad valorem rate and not per hectolitre of product. The rates for alcoholic beverages apply to the value of the goods as follows: 26.5% up to 14° Gay-Lussac (G.L.); 30% above 14° G.L. and up to 20° G.L.; 53% above 20° G.L.
Netherlands. For low alcohol spirits with an alcoholic content <1.2% the VAT rate is 9%.
New Zealand. For alcoholic beverages with 9-14% abv, the excise rate is NZD 2.9054 per litre. For alcoholic beverages above 14% abv, the excise rate is NZD 52.916 per litre of absolute alcohol (with the exception of unfortified wine and vermouth, which has the rate of NZD 2.7870 per litre of product).
Norway. Excise rates on fermented beverages are as follows per hectolitre of product: a) 0.0-0.7% abv: NOK 0; b) 0.7-2.7% abv: NOK 331; c) 2.7-3.7% abv: NOK 1 244; d) 3.7-4.7% abv: NOK 2 155. The excise rate for on fermented beverages with an alcoholic content of more than 4.7% abv is NOK 482 per degree of alcohol and hectolitre. Fermented alcoholic beverages containing from 3.7 up to and including 4.7 per cent alcohol by volume, produced by small breweries (production below 500 000 litres annually): NOK 1 724 per hectolitre for volumes up to and including 50 000 litres annually. NOK 1 832 per hectolitre for volumes from 50 000 up to and including 100 000 litres annually. NOK 1 940 per hectolitre for volumes from 100 000 up to and including 150 000 litres annually. NOK 2 047 per hectolitre for volumes from 150 000 up to and including 200 000 litres annually.
Poland. Reduced rates up to 50% of the basic rate also apply to small producers of intermediate products and fermented beverages. The rate is expressed in hl of the finished product and is not based on the alcohol content of 100% vol. Other fermented beverages - Tax per hectolitre of absolute alcohol: Poland imposes excise tax on other fermented beverages (as defined under WCO customs code 2206) per volume of the finished product (not on the alcohol content of 100% vol). This figure (Tax per hectolitre of absolute alcohol) can therefore not be provided.
Portugal. Intermediate products are taxed at EUR 76.10/hl; Ethyl alcohol/spirits: EUR 1 386.93/hl (rates as at 01 January 2020). Other fermented beverages: EUR 10.44/hl (rates as at 01 January 2022). A reduced rate of 50% applies to small distilleries.
Slovak Republic. A reduced rate of 50 % of the national rate of excise duty on ethyl alcohol, applies to ethyl alcohol produced by fruit growers´ distilleries. The application of the reduced rate is limited to 43 litres of ethyl alcohol for personal consumption of the fruit growers´ household per year. A reduced rate of 50 % of the national excise duty rate on ethyl alcohol applies also on private home producer in max. 25 l absolute alcohol per year.
Slovenia. Tax per hectolitre of absolute alcohol is EUR 1 320. For small producers not producing more than 150 litres of pure alcohol per year, the rate is EUR 660 per hl.
Spain. The excise rate in the Canary Islands is EUR 750.36 per hl of pure alcohol. There is a special regime for small distilleries for which the rate is EUR 839.15 per hl (or EUR 653.34 in the Canary Islands).
Sweden. Excise rates for alcoholic beverages (other than beer and wine) are as follow: a) <2.25% abv SEK 0; b) 2.25%-4.5% abv SEK 919; c) 4.5%-7% abv SEK 1358; d) 7%-8.5% abv SEK 1869; e) 8.5%-15% abv SEK 2618. Intermediate products, a) 1.2%-15% abv SEK 3299; b) 15%-22% abv SEK 5479. Ethyl alcohol, 100 % abv SEK 51659.
Switzerland. Under certain conditions, farmers do not pay tax on the alcohol produced for their personal consumption. A reduced rate of 30 % is applied to the first 30 litres of pure alcohol produced per year by small producers. Normal rate: CHF 2900 per hectolitre. Special rates for certain types of wines: CHF 1450 per hectolitre. Special rate for alcopops: CHF 11 600 per hectolitre (Alcopop - also called ready to drink (RTD) or designer drink) is a mix of alcohol and soda.
Türkiye. The excise rate is 0%. If the tax amount computed according to the tax rate is lower than the minimum tax amount specified in the table, then the minimum tax amount is paid.
United Kingdom. All drinks over 22% are taxed as spirits. Most other mixtures of spirits with other types of alcohol are also taxed as spirits. The duty rates for cider and perry are: still cider and perry exceeding 1.2% but less than 6.9% abv =GBP 40.38. Still cider and perry at least 6.9% but not exceeding 7.5% abv = GBP 50.71. Sparkling cider and perry exceeding 1.2% abv but not exceeding 5.5% abv = GBP 40.38. Sparkling cider and perry exceeding 5.5% but less than 8.5% abv = GBP 288.10.
United States. The weighted average Federal and State excise tax rate for undenatured ethyl alcohol is USD 905 per hectolitre. The Federal excise rate is USD 2.70 per proof gallon for the first 100 000 proof gallons, USD 13.34 on the next 22 130 000 proof gallons, and USD 13.50 for every proof gallon over 22 230 000. A proof gallon is a US gallon (3.785 litres) containing 50% alcohol. There is no Federal VAT. The Federal excise rate for other fermented beverages varies by type. The Federal rate for hard cider is USD 0.164 for the first 30 000 gallons, USD 0.17 for the next 100 000 gallons, USD 0.193 for the next 620 000 gallons, and USD 0.226 for every gallon over 750 000. The Federal rate for mead is USD 0.07 for the first 30 000 gallons, USD 0.17 for the next 100 000 gallons, USD 0.535 for the next 620 000 gallons, and USD 1.07 for every gallon over 750 000.
Australia. The excise rate of AUD 1.11905 per stick applies to cigarettes or cigars (in stick form) not exceeding in weight 0.8 grams per stick actual tobacco content. Other tobacco products are subject to an excise rate of AUD 1598.64 per kilogram of tobacco content. These rates apply from 1 January 2022.
Austria. The excise duty on cigars is 13% of RSP, at least EUR 100 for 1 000 pieces. As of 01/04/2022, rates for cigarettes changed to 33% of RSP and 73 EUR per 1000 pieces; moreover, minimum overall excise duty per 1000 cigarettes increased to 157.98 EUR. The minimum excise duty on cigarettes is 98% of the total excise duty burden on cigarettes falling under the WAP. Minimum excise duty on rolling tobacco for cigarettes is EUR 130 per kg, and 140 EUR per kg as of 01/04/2022.
Belgium. New excise duty rates as from the 1 April 2022: For cigarettes the specific excise is now EUR 90.05 per 1 000 cigarettes. For cigars, the excise on value is now 11.5 %. For rolling tobacco for cigarettes the specific excise changed to EUR 75.17 per 1 000 grams. The other taxes remain the same as on 01 January 2022.
Canada. As of 1 January 2022, the excise duty on cigars was CAD 31.65673 per 1 000 cigars plus an additional excise duty based on the greater of CAD 0.11379 per cigar and 88% of the sale price or the duty-paid value, as the case may be. Automatic inflationary adjustments on tobacco duty rates occur annually on April 1. The most recent inflationary adjustments took effect on 1 April 2022. Each province and territory also levies a tobacco tax at varying rates on all tobacco products. Retail sales prices are subject to GST/HST and, in some cases, when the HST is not applicable, to a provincial sales tax.
Chile. The sale of tobacco products is subject to 19% VAT. There is also a tax levied on the sale or import of processed tobacco, cigarettes and cigars. The tax rate applied on the sale price of processed tobacco is 59.7%. Cigars are taxed at a rate of 52.6%. Cigarettes are taxed at a rate of 30% on the pack’s sale price plus the result of applying a factor of 0.0010304240 to a Monthly Tax Unit per cigarette in a cigarette’s pack (Monthly Tax Unit: CLP 54 171 or USD 63.71 approx.). The tax base of the excise tax considers the sale price to the final consumer, the VAT and the tax levied on tobacco, cigarettes and cigars.
Colombia. Tax rates for cigarettes and manufactured tobacco apply as follows: 10% on retail price with taxes. Cigarettes, cigars, cigarillos and cigarillos: COP 2 800 COP for each pack of 20 units. Fine-cut tobacco, snuff or chimú: COP 223 for each gram. Products of tobacco are subject to a Consumption Tax of 10% of RSP and COP 2 800 for each pack of twenty units. The sale and importation of cigarettes and elaborated tobacco, national and foreign, is taxed at the general rate.
Costa Rica. For this specific tax, there is not an individual statistic as the cigarette’s category gathers the 99% of selective consumption and value added taxes and it includes the cigarettes, cigars and rolling tobacco for cigarettes tax collections.
Czech Republic. As of 1 January 2022, excise duty rates on all types of tobacco products increased by 5 % in comparison to the year 2021.The same tax increase applied to heated tobacco products. These products are subject to the excise tax under a separate category. Excise duty rate on heated tobacco is set at the same level as the tax rate for smoking (rolling) tobacco.
Denmark. The excise tax for other smoking tobaccos than rolling tobacco (e.g. coarse cut tobacco) is DKK 1500.90/1 000 g.
Estonia. For cigarettes, the minimal excise amount to be paid is EUR 152.85 per 1000 items. For cigars and cigarillos, the minimal excise amount to be paid is EUR 211 per 1000 items.
Finland. Cigarette paper: excise 60% of RSP. Other smoking tobacco: EUR 83.50 /kg and 48 % of RSP. Heated tobacco products: EUR 0.30/g. E-liquids (with nicotine or without nicotine) EUR 0.30/ml. The rates will be increased as of 1 July 2022, 1 January 2023 and 1 July 2023.
France. The minimal excise amounts to be paid are EUR 336.7 per 1000 items for cigarettes, EUR 268.9 per 1000 items for cigars and EUR 305.3 per 1000g for rolling tobacco for cigarettes.
Germany. The minimum overall excise rate per 1000 cigarettes is EUR 222.76 less VAT of the TIRSP (Tax included retail selling price, i. e. all taxes included). The minimum overall excise rate per 1000 cigars is EUR 66.32 less VAT of the TIRSP. The minimum overall rate per 1000 grams rolling tobacco for cigarettes is EUR 102.65 less VAT of the TIRSP. Other smoking tobacco is subject to excise duty at a rate of EUR 15.66/kg and 13.13% of RSP. Minimum excise duty is EUR 24/kg for other smoking tobacco. The excise duty for heated tobacco products is 80 percent of the excise duty for cigarettes. Water pipe tobacco is taxed as other smoking tobacco. In addition, an excise duty of EUR 15.00/kg is levied. As of 1 July, an excise duty of EUR 0.16/ml will be levied on substances for e-cigarettes.
Greece. Minimum excise duty is 117.5 EUR per 1000 cigarettes. Other smoking tobacco is subject to excise duty at a rate of EUR 156.7 per kg of net weight.
Hungary. Minimum excise tax is HUF 39 300 per 1000 pieces for cigarettes, HUF 4 400 per 1000 pieces for cigar and cigarillo. VAT as % of tax included retail selling price is 21.26%.
Iceland. There is no specific excise rate for a piece of cigar. The rate is ISK 30 150 per 1000 grams of cigars (i.e. the same rate as for rolling tobacco).
Ireland. The rate of excise duty on cigarettes is EUR 383.42 per 1000 cigarettes together with an amount equal to 8.83% of the price at which the cigarettes are sold by retail or EUR 434.19 per 1000 cigarettes, whichever is the greater. The rate of excise duty on cigars is EUR 434.496 per kilogram. The rate of excise duty on fine-cut tobacco for the rolling of cigarettes is EUR 418.010 per kilogram. Other smoking tobacco is subject to excise duty at a rate of EUR 301.434 per kilogram.
Israel. Excises on value for cigarettes are 270% of the wholesale price plus ILS 408.12 per 1000 cigarettes and for cigars the excise is 90% of the wholesale price and not less than ILS 74.02 per kilogram. Excises on value for rolling tobacco are 270% of the wholesale price plus ILS 583.04 per kilogram and not less than ILS 1116.91 per kilogram.
Italy. An overall minimum tax, i.e. excise duty plus VAT, was introduced from 1 January 2015. Starting from 16 January 2021 such tax amounts to EUR 193.21 for 1 000 cigarettes (i.e. 96.22% of the excise duty plus VAT on the WAP).
Japan. The tax consists of a national element, a prefectural element and a municipal element.
Korea. The excise tax on cigars is KRW 294800/1000g. National tax (Individual Consumption Tax) levies on tobacco since 2015.
Lithuania. The excise rate for cigars and cigarillos is set per kilogram at a rate of EUR 66.00/kg. From 1 March 2019 liquids for e-cigarettes are subject to excise duty, and the excise duty rate for them is EUR 0.15 per ml of the product from 1 January 2022. From 1 March 2019 heated tobacco products are subject to excise duty as a separate category (until 28 February 2019, the rate of smoking tobacco was applied for heated tobacco products). As of 1 January 2022, heated herbal sticks of vegetable origin which does not contain tobacco shall be considered to be heated tobacco products. The rate of excise duty for heated tobacco products is applied per 1,000 items from 1 January 2022 (before was per kilogram of tobacco) and the rate for them is EUR 45.6 per 1 000 items.
Luxembourg. As of the 1st February 2022 the excise duties applicable are: Cigarettes Specific excise per 1 000 cigarettes: EUR 19.3914; Excise on value: 46.90%. Rolling tobacco for cigarettes Specific excise per 1 000 grams: EUR19.50; Excise on value: 34.25%. The minimal excise amounts to be paid are EUR 124 per 1000 items for cigarettes, EUR 23.50 per 1000 items for cigars and EUR 58.50 per 1000g for rolling tobacco for cigarettes.
Mexico. An ad-valorem rate of 160% on the producer or importer price applies for all categories. A reduced rate of 30.4% applies for cigars or rolling tobacco as long as these products are fully handmade. The ad-valorem tax applies at the stage of the producer or importer but on the retail price. In addition a charge of MXN 0.5484 should be paid for each sold or imported cigarette. This charge also applies for cigars and other tobacco (MXN 0.5484 per each 0.75 grams), with the exemption of those that are fully handmade.
New Zealand. The excise rate for 1 000 cigarettes with actual tobacco content not exceeding in weight of 0.8 kg is NZD1 030.90 per kilo tobacco content. The excise rate for cigarettes exceeding 0.8 kg in actual tobacco content per 1 000 cigarettes and for rolling tobacco for cigarettes is NZD 1 469.03 per kilo tobacco content. The excise rate for other tobacco products, such as snuff, cigars, cheroots and cigarillos is NZD 1 288.59 per kilo of tobacco content.
Poland. Since 1 January 2015, the excise duty rate for cigars is calculated on a per kilogramme basis. The minimum excise duty on cigarettes is 105% of the total excise duty amount charged on the price equal to the WAP. The minimum excise duty on rolling tobacco is 100% of the total excise duty amount charged on the price equal to the WAP. Minimum overall excise rate per 1000 cigars: Poland imposes excise tax on cigars per kilogramme basis. For that reason this figure cannot be provided.
Portugal. Rates applicable on 1 January 2021. Excise duty on cigarettes is reduced to: (1) EUR 34.00 per 1000 and 42% on value for cigarettes sold in Azores Islands and made by small producers from the Azores and Madeira Islands; (2) EUR 82.34 per 1000 and 18% on value for cigarettes sold in Madeira Island and made by small producers from the Azores and Madeira Islands.
Slovak Republic. As of the 1st February 2022 the excise duty rates applicable are: cigarettes specific excise per 1 000 cigarettes: EUR 79.60; Excise on value: 23.00%; Minimum overall excise rate per 1000 cigarettes: EUR 124.30; Rolling tobacco for cigarettes Specific excise per 1 000 grams: EUR 95.30. Tax on rolling tobacco for cigarettes includes other smoking tobacco. The excise for cigars is EUR 76.70/kg. The rates will be increased as of 1 February 2023. Heated tobacco products: the tax base is the weight of tobacco in the smokeless tobacco product, expressed in kilograms, the excise duty rate applicable at 1 January 2022 was EUR 132,20/kg and as of the 1st February 2022 the excise duty rate is EUR 160/kg. The rate will be increased as of 1 February 2023 as well.
Slovenia. Minimum excise duty is EUR 123 per 1 000 cigarettes. Minimum excise duty is EUR 105 per kilo of rolling tobacco for cigarettes. Minimum excise duty for cigars is EUR 48 per 1 000. As of 1 April 2022, minimum excise duty is EUR 126 per 1 000 cigarettes. Specific excise per 1 000 cigarettes is EUR 80.447, Excise on value is 23.54%.
Sweden. Cigarettes with a length over 8 cm up to 11 cm should be taxed as two cigarettes. If the cigarette is longer than 11 cm every started additional 3 cm is considered a cigarette.
Switzerland. If the Retail Selling Price for 1 000 cigarettes is CHF 375.00 or less, minimum excise duty (specific + on value) yields CHF 212.10 for 1 000 pieces. Specific excise per 1 000 grams of rolling tobacco for cigarettes: the minimum excise duty (specific + on value) yields CHF 80.00 per 1 000 grams.
Türkiye. Minimum tax amount per 1000 cigarettes is TL 719.70. Specific tax amount is TL 0.7150 for 1 pack of cigarettes. Tax on cigarettes and other tobacco products computed according to the tax rate cannot be less than the minimum tax amount. After calculating the tax according to minimum tax amount system, specific tax amount is added to the tax for 1 pack of cigarettes.
United Kingdom. Retail selling price (RSP) of cigarettes is typically based on Recommended Retail Price (RRP). RRP is usually taken as the manufacturer’s or importer’s recommended retail selling price in force at the time the cigarettes become chargeable with duty. Specific excise rate for cigars is given per kilogramme and not for 1 000 units. Specific rates exist for "other smoking tobacco and chewing tobacco" and “tobacco for heating” which at 1 January 2022 were set at GBP 144.17 and GBP 270.22 per kilo respectively.
United States. State taxes vary widely. The weighted average of Federal and State taxes per thousand cigarettes is USD 132.00. Federal specific excise tax rates on tobacco are: USD 50.33 per thousand for small cigarettes (no more than 3 pounds per thousand); USD 105.69 per thousand for large cigarettes; USD 50.33 per thousand for small cigars weighing no more than 3 pounds per thousand; 52.75% of the manufacturers price but not more than USD 402.60 per thousand for large cigars; and USD 24.78 per pound (54.63 per kg) for roll-your-own tobacco. Some states also tax on an ad valorem basis.
Member States of the European Union. Council Directive 2011/64/EU sets minimum rates on cigarettes, i.e. a specific component of between 7.5% and 76.5% of the total tax burden (TTB) - expressed as a fixed amount per 1000 cigarettes; and an ad valorem component - expressed as a percentage of the maximum retail selling price. In addition, the overall excise rate must be at least EUR 90 per 1000 cigarettes and at least 60% of the weighted average retail selling price. Member States that apply excise duty of EUR 115 or more, however, do not need to comply with the 60% criterion above.
Colombia. For consumption tax on cigarettes and tobacco collected by the territories (“departmentos”), please see Country note to Table 3.4.
Czech Republic. Weighted Average Price of cigarettes (WAP) calculated in line with the EU legislation was 5749 CZK/1000 pcs of cigarettes in 2021.
Denmark. The price from WHO is for the "most sold brand". The "average price" of all brands was 54,02 DKK and the Total tax share % RSP was 85,35.
Estonia. Weighted average price (WAP) of cigarettes is 4.47 EUR per pack of 20 cigarettes in 2021. Excise share in WAP is 68.7% and excise share with VAT is 85.37%. Price without excise and VAT is 0,654 EUR (on bases of excise duty rate and WAP in 2021).
Finland. Average price for cigarettes 1.7.-31.12.2020: 8.65 per 20 cigarettes pack.
Greece. On 31/07/2021 the WAP was 209.74 EUR per 1000 cigarettes.
Latvia: WAP of 1000 cigarettes was 189.40 euro in 2021.
Mexico. Prices and taxes are collected and calculated as of February 2021.
Portugal. As of July 2021 the price of the most sold brand has increased from 4.40 to 4.50 (Total tax share % RSP 7 759).
Slovak Republic. Weighted Average Price of cigarettes (WAP) was 172.99 EUR/1 000 pcs of cigarettes in 2020 and 197.19 EUR/1000 pcs of cigarettes in 2021.
Canada and the United States. National average estimates calculated for prices and taxes reflect the fact that different rates are applied by state/province over and above the applicable federal tax.
Australia. No data is available.
Austria. The excise amount shown in the table includes the Mineral Oil Tax (EUR 0.098/l that applies to light fuel oil with sulphur content ≤ 10mg/kg. Otherwise, the excise duty is EUR 0.128/l) and the Emergency Stock Fee (EUR 0.0112/l).
Belgium. The excise amount shown in the table applies to fuel oil with a sulphur content ≤ 10 mg/kg.
Canada. Fuel oil is assumed to be heating oil. There is no federal or provincial fuel tax on heating oil. The federal GST rate is 5%. Most provinces do not apply their provincial GST/retail sales tax on heating oil. Provincial taxes (incl. Sales taxes, HST and QST) are considered as part of excise taxes and are calculated by subtracting the federal GST amount, calculated using the applicable federal rate, from the total taxes reported in NRCan’s website (IEA Energy Prices Documentation 2022).
Chile. Domestic Kerosene is covered by the Oil Price Stabilisation Fund (Fondo de Estabilización de Precios del Petróleo or FEPP, which applies as a tax or as a fiscal credit/subsidy weekly, and it is measured in USD per m3. This tax cannot be included in the VAT base at any stage of the value chain (import, production, refining, distribution or sale to the consumer). On the contrary, the fiscal credit may be deducted from the taxable base either on the first sale or importation. Unlike in other OECD countries, the VAT base is the ex-tax price only, instead of the sum of ex-tax price and excise tax.
Colombia. Surtax on gasoline and ACPM: the total rate per gallon results from adding together that of the municipality and the department. The rate per litre conversion is done by taking 1 gallon = 3.785411 litres. Fuel: a) Regular fuel: COP 1 270 per gallon (COP 335.5 per litre); b) Extra fuel: COP 1 775 per gallon (COP 468.9 per litre). General rate for Municipalities Border areas: c) Regular fuel: COP 476 per gallon (COP 125.75 per litre); d) Extra fuel: COP 1 776 per gallon (COP 469.2 per litre); e) the municipality can set a differential rate of COP 114 per gallon of regular fuel (COP 30.12 per litre); f) and COP 426 per gallon of foreign fuel (COP 112.5 per litre). ACPM: COP 301 per gallon. (COP 79.51 per litre). Municipalities in border areas: COP 204 per gallon for the national product ($53.89 per litre) and COP114 per gallon for imported product (COP 30.12 per litre). Rates in border areas will apply exclusively to the maximum volumes assigned to the different agents of the fuel distribution chain. For sales above the volumes mentioned or agents that are not subject to them, the rate of the surcharge on fuel per gallon and the surcharge on ACPM per gallon will be the respective general rate. Fuel used for electricity generation in non-interconnected areas, aviation turbo fuel and IFO-type mixtures used for the operation of large maritime vessels are excluded from the surcharge. Fuels used in fishing and/or cabotage activities on the Colombian coast and in maritime activities carried out by the National Navy are excluded from the surcharge. To control this operation, strict consumption quotas are established and its management is regulated by the Government. 100/130 fuel used in aircraft is excluded.
Costa Rica. Kerosene is mainly used at an industrial level in bakery ovens and manufacturing companies and in some rural areas for lighting lanterns and for cooking food. The Ministry of Finance updates the amount of the tax quarterly, in accordance with the variation in the consumer price index determined by the National Institute of Statistics and Censuses (INEC). In no case may the quarterly adjustment exceed three percent (3%).
Czech Republic. Until Q4 2003, light fuel oil used for heating purposes was tax-free. From Q1 2004 onwards, light fuel oil used for heating purposes is subject to a partial refund on the applicable excise duties. Fuel oil marked in accordance with Directive 95/60/EC is subject to reimbursement of an excise duty amount of CZK 9 290/1000 l when it has been duly proven that the fuel oil has been used for heating purposes. The excise amount shown in the table includes the reimbursement. However the VAT amount is calculated on the full excise value.
Denmark. The amount of DKK 2.745/l includes the Excise tax of DKK 2.261/l; the Environment tax of DKK 0.475/l and the NOx tax of DKK 0.0009/l.
Finland. In 2022 the excise amount of EUR 0.2758/l for sulphur-free product includes the energy content tax EUR 0.1033, CO2 tax EUR 0.1690 and the strategic stockpile fee (EUR 0.0035). The tax for product containing sulphur is EUR 0.0265 higher.
Germany. The value in the table for excise amount includes excise tax (EUR 0.06135/l) and price on carbon emissions (EUR 0.08029/l). The excise amount is for properly marked gas oil with a sulphur content ≤ 50mg/kg. Otherwise the component of excise is EUR 0.076435/l.
Greece. The excise of EUR 0.280/l for heating oil for households applies during the winter season (15 October - 30 April). Otherwise the excise is 0.410/l.
Hungary. Excise amount depends on the world market price of crude oil. If the world market price of crude oil is higher than 50 USD/barrel the excise amount is HUF 114.233/l (including the excise duty of HUF 110.35/l and the strategic stock fee of HUF 3.883/l). If the world market price of crude oil is 50 USD/barrel or less the excise amount is HUF 124.233 (including the excise duty of HUF 120.35/l and the strategic stock fee of HUF 3.883/l). Prices and taxes are not available in IEA data since, according to the Hungarian Energy and Public Utility Regulatory Authority, the residential use of the LFO product is not significant enough in Hungary compared to other energy products. Temporary reduction to counter rising energy costs: on 28 February 2022 the excise duty was reduced by 5 HUF/litre and the strategic stock fee had been suspended; on 10 March the excise duty was reduced by further 20 HUF/litre. These measures are scheduled to remain in force until 1 July 2022.
Iceland. No data is available. The share of fuel oil in house heating is well below 1%.
Ireland. The 'Excise' amount includes a National Oil Reserves Agency (NORA) levy, which is charged at a rate of EUR 0.02 per litre. The MOT rate of EUR 0.13817 per litre applies to marked gas oil (marked diesel). From 10 March 2022 to 30 April 2022 the MOT rate for marked gas oil decreased to EUR 0.12055 per litre. From 1 May 2022, the rate decreased further to EUR 0.11114 per litre. Marked kerosene is also widely used for heating (including domestic heating) and the rate for that is EUR 0.08484 per litre. From 1 May 2022, the MOT rate on marked kerosene increased to EUR 0.10383 per litre.
Italy. The value shown in the table corresponds to the rate for heating oil. In Italy LPG can be also used for the same purpose and the rate is EUR 0.18994458/kg.
Japan. Kerosene for households.
Korea. Kerosene for households.
Latvia. Starting from 1 July 2021, excise tax of EUR 0.060/litre applies to marked fuel for heating purposes.
Luxembourg. A reduced VAT rate of 14% applies to heating gas oil.
Mexico. Fuel oil as heating oil for households is only used in small areas in northern Mexico and no sales have been registered since 2016. Fuel oil as residual oil (combustoleo) is not used by households but is taxed with an excise equal to MXN 16.99 cents per litre. Other fossil fuels that are used for heating are propane (MXN 7.48 cents per litre), butane (MXN 9.68 cents per litre), kerosene (MXN 15.67 cents per litre), diesel (MXN 15.92 cents per litre) and coal (MXN 34.81 pesos per ton).
Netherlands. For gasoline a stockpiling tax of 0.008/l applies, this is not included in the mentioned excise rate. Temporary reduction in order to counter rising energy costs: in the case of fuel oil for households, which in the Netherlands is not used as much as natural gas, rates were reduced to 417,46 EUR/1000L from the 1st of April 2022.
New Zealand. No data is provided because the product is not consumed in significant quantities.
Norway. From 2020 the use of mineral oil (fossil oil) for heating of buildings has been banned. The ban covers the use of mineral oil for both main heating (base load) and additional heating (peak load) in residential buildings, public buildings and commercial buildings.
Poland. Temporary reduction in order to counter rising energy costs: from 1 June to 31 December 2022, the excise duty rate for light fuel oil used for heating purposes is reduced to 0,097 PLN/litre.
Slovak Republic. No data is provided because the product is not consumed in significant quantities.
Slovenia. Situation as at 1 January 2022: the amount of EUR 233.77 per 1 000 litres includes the excise duty of EUR 157.50, EUR 11.66 strategic stockpile on gasoil used for heating purposes, EUR 8.00 surcharge on energy end-use efficiency on gasoil used for heating purposes, EUR 9.90 surcharge for the promotion of electricity generation from renewable energy sources and high-efficiency cogeneration on gasoil used for heating purposes, and EUR 46.71 CO2-tax. Temporary reduction to counter rising energy costs (situation as at 5 July 2022): the excise amount of EUR 108.31 per 1000 litres includes excise duty of EUR 78.75, EUR 11.66 per 1000 litres strategic stockpile on gasoil used for heating purposes, EUR 8.00 per 1000 litres surcharge on energy end-use efficiency on gasoil used for heating purposes, EUR 9.90 per 1000 litres surcharge for the promotion of electricity generation from renewable energy sources and high-efficiency cogeneration on gasoil used for heating purposes.
Spain. The excise amount of EUR 0.097/l includes the general Excise tax (EUR 0.079/l) and the special tax rate (EUR 0.018/l).
Switzerland. The excise amount includes the Excise tax and the CO2 tax.
Türkiye. Kerosene for households.
United States. Average federal and state taxes - there is no VAT.
European Union. Directive 2003/96/EC sets minimal excise rates for energy products and electricity.
Minor differences may occur between some of the amounts indicated in these country notes and those indicated in the table. These may be due to differences in calculation methods between the statistical institutes (who provided the data in the table) and the tax authorities (who provided the country notes).