What Is The Canada Vape Tax?
The Canadian federal government has announced a new tax on vaping products that will take effect October 1st, 2022. The government will be implementing an additional tax a so called excise duty for vaping products in Canada, on top of any HST or GST you may already pay. The Canada vape tax is imposed by the Canada Government and managed by the Canada Revenue Agency. Learn about the Canada Vape Tax in this article!
Vapers are confused by the new tax, and many people want to know what it all means. In this article, we will discuss the Canada Vape Tax and answer all of your questions.
Canada Vape Tax – Excise Duty
What exactly is an excise duty you may ask? An excise duty is a type of tax that is levied on goods for their production, licensing and sale. This tax is typically collected by the Canadian federal government and can be considered harmful to public health, such as tobacco and alcohol.
The excise duty on e-Liquid is a new tax that will be introduced in Canada on October 1st, 2022. This tax will require all pre-filled e-Liquid bottles or cartridges (produced and imported to Canada) to be labeled with an excise-tax stamp. Excise tax stamps are used to indicate that a certain good or product has been taxed and is already used on items such as cigarettes and alcohol.
Who Pays This New Excise Duty?
Initially the excise duty is paid by companies that manufacture vaping products, which is then passed on to the customer. In the case of vaping, the final consumer pays the vaping tax to the retailer.
What Products Are Affected By The Excise Duty?
Only e-Liquid or anything that contains vape juice will be affected by the new excise duty. The tax is going to be applied to bottled e-Liquids as well as pre-filled pod system e-Liquids (including disposable vapes). The tax applies whether the eJuice contains nicotine or not.
Vape hardware will not be affected by the Canada vape tax, as long as they do not contain any e-Liquids.
Excise Duty Rates
Duty On Refillable e-Liquids
$1 per 2 ml, or fraction thereof in the device, for the first 10 ml
$1 per 10 ml, or fraction thereof, for amounts over the first 10 ml
Duty On Hardware Devices Filled With e-Liquid
If a package contains 3 pods, with each pod containing 1.5 ml of eJuice, the vape duty in this example would equal $3.
Please be aware that the vaping duty is calculated on the quantity of e-Liquid in each package, not across all bottles.
Canada Vape Tax Calculation Examples
Vape Taxation On 30 mls
If you purchase a 30 mls bottle of eJuice in Canada, the new tax is going to be $5 for the first 10 mls and $2 for the next 20 mls. Which makes the total vape tax on a 30 mls bottle $7. Per ml this works out to be a tax of approximately $0.23 cents per ml.
Vape Taxation On 60 mls
If you purchase a 60 mls bottle of eJuice in Canada, the new tax is going to be $5 for the first 10 mls and $5 for the next 50 mls. Which makes the total vape tax on a 60 mls bottle $10. Per ml this works out to be a tax of approximately $0.16 cents per ml.
Vape Taxation on 130mls – Best Value!
If you purchase a 130 mls bottle of eJuice in Canada, the new tax will be $5 for the first 10 mls and $12 for the next 120 mls. Which makes the total vape tax on a 130 mls bottle $17. Per ml this works out to be a tax of approximately $0.13 cents per ml. This definitely is your best value!
Again the new Canada Vape tax will only be applied on electronic cigarette e-Liquids. It does not affect any vape hardware.
When Does This Vape Tax Start In Canada?
During the transition period between October 1st, 2022 and December 31st, 2022 you will find products that are taxed and others that aren’t. Exempt from the tax are e-Liquids held in inventory by retailers at the time of implementation (October 1st, 2022).
Also, there will be a sell-through window for all retailers from October 1st to December 31st 2022. They can sell their inventories without having to charge the tax.
Nevertheless all e-Liquids imported but not manufactured in Canada are required to have the tax stamp starting October first, 2022.
From January 1st, 2023 all e-Liquid items, produced in Canada or imported, will need to include the new excise tax.
It is suggested to stock up on e-Liquids before the new Canada Vape Tax is being applied. It is the perfect time to save money for the future!