On the introduction of excise taxation of nicotine-containing products for oral use from September 1, 2024

On the introduction of excise taxation of nicotine-containing products for oral use and their distinction as separate types of nicotine-containing products for oral use from September 1, 2024.

Starting from September 1, 2024, transactions for the sale of goods manufactured in Ukraine/imported into the customs territory of Ukraine under the code 2404 91 90 00 "Other nicotine-containing products for oral use", which are included in the list of excisable goods, are subject to excise tax in accordance with the provisions of the Law of Ukraine dated 16.01.2024 No. 3553-IX "On Amendments to the Tax Code of Ukraine on Bringing Certain Provisions in Line with the Law of Ukraine "On the Customs Tariff of Ukraine" and Clarifying Certain Provisions" (the "Law").

At the same time, the list of excisable goods does not include goods of the subcategory 2404 91 10 00 of the Ukrainian Classification of Goods for Foreign Economic Activity (UCGFEA) "Nicotine-containing products intended to promote the cessation of tobacco use".

In order to prevent possible threats related to tax evasion due to the unlawful classification of nicotine-containing products for oral use of subheading 2404 91 90 00 "Other nicotine-containing products for oral use", which are subject to excise tax, to subheading 2404 91 10 00 "Products, containing nicotine, intended to promote the cessation of tobacco use", which are not classified as excisable goods, one should take into account the information provided by the letters of the Ministry of Health of Ukraine and the State Customs Service of Ukraine regarding the classification of nicotine-containing products as nicotine replacement therapy and those intended to promote the cessation of tobacco use, namely

nicotine replacement therapy is regulated by the Order of the Ministry of Health of Ukraine No. 746 dated 26.09.2012 "On Approval of Methodological Recommendations for Medical Professionals of Health Care Institutions on Providing Treatment and Preventive Care to Persons Who Wish to Get Rid of Tobacco Dependence";

Order of the Ministry of Health of Ukraine No. 601 of 03.08.2012 "On Approval and Implementation of Medical and Technological Documents on Standardization of Medical Care for Tobacco Products Cessation" approved the Standards of Primary Medical Care for Tobacco Products Cessation, which includes "Standard 5. Medical care for the cessation of tobacco use is provided in a comprehensive manner, using non-pharmacological methods and pharmacotherapy" (hereinafter - Standard 5).

The 10th revision of the International Classification of Diseases classifies tobacco as a psychoactive substance and, accordingly, disorders resulting from its use are classified as mental and behavioral.

Standard 5 provides for the following mandatory criteria:

• pharmacotherapy should use medicines with proven efficacy in terms of their effects;
• medicines for nicotine replacement and non-nicotine replacement therapy must be prescribed by a medical (pharmaceutical) professional.

Annex 4 to the Standards for Primary Care in Tobacco Cessation defines the list of medicines with proven efficacy that are allowed in Ukraine for use in NRT (nicotine replacement therapy):

• nicotine chewing gum, international nonproprietary name (hereinafter - INN) - Nicotine;
• Nicotine patch, International Nonproprietary Name - Nicotine.

Medicinal product is any substance or combination of substances (one or more APIs and excipients) that has properties and is intended for the treatment or prevention of diseases in humans, or any substance or combination of substances (one or more APIs and excipients) that can be intended to prevent pregnancy, restore, correct or change physiological functions in humans through pharmacological, immunological or metabolic effects or to establish a medical diagnosis (paragraph two of part one of Article 2 of the Law of Ukraine "On Medicinal Products").

Information about medicinal products is contained in the State Register of Medicinal Products of Ukraine.

In view of the above, only medicinal products are products intended to promote tobacco use cessation.

Any other products that are not medicinal products do not have proven efficacy in tobacco cessation and therefore cannot be intended to promote tobacco cessation.

Therefore, taking into account the information provided by the Ministry of Health, the legitimacy of classifying nicotine-containing products as products of the subcategory 2404 91 10 00 "Nicotine-containing products intended to promote tobacco use" should be confirmed by the availability of information about such products in the State Register of Medicines of Ukraine.