Nicotine-containing oral products: new taxation and labeling rules

The State Tax Service of Ukraine informs on the procedure for introducing excise taxation of nicotine-containing products for oral use and their labeling with excise tax stamps starting from September 1, 2024.

The Verkhovna Rada of Ukraine adopted the Law of Ukraine dated January 16, 2024 No. 3553-IX "On Amendments to the Tax Code of Ukraine to Bring Certain Provisions in Line with the Law of Ukraine "On the Customs Tariff of Ukraine" and Clarify Certain Provisions" (the "Law").

The said Law shall enter into force on the first day of the month following the month of its publication, i.e., given its publication (Holos Ukrainy, 2024, 02, 13.02.2024, No. 4 (56)), on March 01, 2024.

According to this law, starting from September 1, 2024, operations on the import and sale of goods under the code 2404 91 90 00 "Other nicotine-containing products for oral use", which are included in the list of excisable goods, will be subject to excise tax at the rate of UAH 2,363.4 per 1 kilogram (net) of such product, and from January 1, 2025 - UAH 2,836.08 per 1 kilogram (net) of such product.

All requirements for excise taxation, including the 5% excise tax on retail sales of excisable goods, as well as the marking with excise tax stamps of other nicotine-containing oral products included in the list of excisable goods, as well as liability for non-compliance (no excise tax stamps, sale at prices higher than the maximum retail prices) will apply starting from September 1, 2024.

For the purposes of the introduction of excise taxation, including a 5% excise tax on retail sales of excisable goods, including other nicotine-containing products for oral use, starting from September 1, 2024, taxpayers have the right in accordance with Articles 220 and 226 of the Tax Code

• no later than two months in advance, to meet the need for stamps in September 2024, submit a preliminary application-calculation of the need for excise tax stamps "domestic tobacco (other products)" - "TV OTHER", "imported tobacco (other products)" - "TI OTHER" in the amount required for labeling other nicotine-containing products for oral use
• no later than August 25, 2024, to submit to the central executive body implementing the state tax policy a Declaration on maximum retail prices for excisable goods (products) to establish maximum retail prices for other nicotine-containing products for oral use starting from September 1, 2024.

In order to ensure timely labeling of other nicotine-containing products for oral use for the purpose of their importation into the customs territory of Ukraine and sale from September 1, 2024, manufacturers and importers of such products may obtain excise tax stamps by September 1, 2024 only if they submit to the seller of such stamps an application for payment in the form approved by the central executive body responsible for the formation and implementation of state financial policy, documents confirming the payment of the excise tax.