In order to improve the consumption tax system, maintain the fairness and unity of the tax system, and give better play to the role of consumption tax in guiding healthy consumption, the relevant matters concerning the collection of consumption tax on electronic cigarettes are hereby announced as follows:
- About tax items and tax objects
Include e-cigarettes into the scope of consumption tax collection, and add e-cigarette sub-items under the tobacco tax item.
Electronic cigarettes refer to electronic transmission systems used to generate aerosols for people to smoke, including pods, cigarette sets, and electronic cigarette products sold in combination with pods and cigarette sets. Cartridges refer to electronic cigarette components that contain atomized substances. Smoking equipment refers to electronic devices that atomize atomized substances into inhalable aerosols.
See the attachment for the import and export tariff numbers and commodity names of electronic cigarettes.
- About taxpayers
Units and individuals that produce (import) and wholesale electronic cigarettes within the territory of the People’s Republic of China are taxpayers of consumption tax.
The taxpayer of electronic cigarette production refers to the enterprise that has obtained the license of tobacco monopoly production enterprise, and obtained or licensed to use the registered trademark (hereinafter referred to as the trademark) of other people’s electronic cigarette products. If electronic cigarettes are produced through OEM, the enterprise holding the trademark shall pay the consumption tax. The taxpayer of electronic cigarette wholesale refers to the enterprise that has obtained the license of tobacco monopoly wholesale enterprise and operates the wholesale business of electronic cigarette. Taxpayers in the import of electronic cigarettes refer to units and individuals who import electronic cigarettes.
- About the applicable tax rate
Electronic cigarettes are subject to ad valorem pricing to calculate tax. The tax rate for the production (import) link is 36%, and the tax rate for the wholesale link is 11%.
- About the taxable price
Taxpayers who produce and wholesale electronic cigarettes shall pay taxes based on the sales of electronic cigarettes produced and wholesaled. Taxpayers who sell electronic cigarettes through agency sales in the production process of electronic cigarettes shall pay taxes based on the sales of distributors (agents) to electronic cigarette wholesale enterprises. Taxpayers who import electronic cigarettes shall pay taxes according to the component taxable price.
Taxpayers engaged in electronic cigarette processing business in the production link of electronic cigarettes shall separately calculate the sales of electronic cigarettes with trademarks and the sales of electronic cigarettes processed on behalf of others; if they are not accounted for separately, they shall pay consumption tax together.
- About import and export policies
Taxpayers exporting electronic cigarettes shall be subject to the export tax rebate (exemption) policy.
Add electronic cigarettes to the list of non-tax-free imported goods in the border market and tax them according to regulations.
In addition to the above provisions, the consumption tax collection of electronic cigarettes carried or delivered by individuals shall be implemented in accordance with the relevant regulations of the State Council. Other matters of e-cigarette consumption tax shall be implemented in accordance with the “Interim Regulations of the People’s Republic of China on Consumption Tax” and the “Implementation Rules of the Interim Regulations of the People’s Republic of China on Consumption Tax”.
This announcement will be implemented from November 1, 2022.