Cigarette Taxes in Europe

August 22, 2019

King James I, King of England and Ireland, imposed the first levy on tobacco in 1604, an import tax of 6 shillings 10 pence to the pound. Today, Ireland and the United Kingdom levy the highest excise duties on cigarettes in the European Union (EU), at €7.57 (US $8.93) and €6.57 ($7.75) per 20-cigarette pack, respectively. This compares to an EU average of €3.09 ($3.64). In contrast, Bulgaria (€1.76 or $2.07) and Hungary (€1.96 or $2.31) levy the lowest excise duties.

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To ensure the functioning of its internal market, the EU sets a minimum excise duty on cigarettes. It consists of a specific component and an ad valorem component, resulting in a minimum overall excise duty of €1.80 ($2.12) per 20-cigarette pack and 60 percent of an EU country’s weighted average retail selling price (certain exceptions apply). On top of excise duties, all EU countries levy a value-added tax (VAT) on cigarettes.

Taking into account both excise duties and VAT, the average share of taxes paid on a 20-pack of cigarettes ranges from 91.6 percent in the United Kingdom to 69.3 percent in Luxembourg (as a percent of the weighted average retail sales price).

Taxes on Cigarettes in the European Union per 20-Cigarette Pack, as of March 2019

Notes: The excise duties were converted into USD using the average 2018 USD-EUR exchange rate (0.848); see IRS, “Yearly Average Currency Exchange Rates,” https://www.irs.gov/individuals/international-taxpayers/yearly-average-currency-exchange-rates.

Source: European Commission, “Excise Duty Tables: Part III – Manufactured Tobacco,” https://ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/taxation/excise_duties/tobacco_products/rates/excise_duties-part_iii_tobacco_en.pdf.

 

Excise Duty

Total Tax (Excise Duty and VAT)

Weighted Average Retail Sale Price (Including Excise Duty and VAT)

Tax as a Share of the Weighted Average Retail Sales Price
  EUR USD EUR USD EUR USD  
Austria (AT) €2.95 $3.47 €3.74 $4.41 €4.76 $5.62 78.5%
Belgium (BE) €3.77 $4.45 €4.83 $5.70 €6.10 $7.19 79.2%
Bulgaria (BG) €1.76 $2.07 €2.18 $2.58 €2.57 $3.03 85.1%
Croatia (HR) €2.04 $2.41 €2.71 $3.19 €3.35 $3.95 80.9%
Cyprus (CY) €2.57 $3.03 €3.26 $3.85 €4.33 $5.11 75.4%
Czech Republic (CZ) €2.07 $2.45 €2.68 $3.16 €3.48 $4.11 76.9%
Denmark (DK) €3.23 $3.80 €4.30 $5.07 €5.39 $6.35 79.9%
Estonia (EE) €2.62 $3.08 €3.21 $3.78 €3.55 $4.19 90.3%
Finland (FI) €4.73 $5.58 €6.02 $7.10 €6.70 $7.90 89.9%
France (FR) €5.24 $6.18 €6.54 $7.71 €7.78 $9.17 84.1%
Germany (DE) €3.19 $3.76 €4.09 $4.82 €5.64 $6.65 72.5%
Greece (GR) €2.74 $3.23 €3.55 $4.18 €4.18 $4.93 84.8%
Hungary (HU) €1.96 $2.31 €2.69 $3.18 €3.46 $4.08 77.8%
Ireland (IE) €7.57 $8.93 €9.70 $11.43 €11.37 $13.41 85.3%
Italy (IT) €2.92 $3.44 €3.80 $4.48 €4.90 $5.78 77.5%
Latvia (LV) €2.13 $2.51 €2.69 $3.17 €3.20 $3.77 84.0%
Lithuania (LT) €1.98 $2.33 €2.53 $2.98 €3.18 $3.75 79.5%
Luxembourg (LU) €2.54 $3.00 €3.22 $3.79 €4.64 $5.47 69.3%
Malta (MT) €3.37 $3.97 €4.17 $4.92 €5.25 $6.19 79.4%
Netherlands (NL) €3.81 $4.50 €4.89 $5.76 €6.19 $7.30 79.0%
Poland (PL) €1.99 $2.35 €2.60 $3.06 €3.26 $3.84 79.8%
Portugal (PT) €2.60 $3.06 €3.44 $4.05 €4.49 $5.30 76.5%
Romania (RO) €2.08 $2.45 €2.62 $3.09 €3.40 $4.01 77.0%
Slovakia (SK) €1.98 $2.33 €2.52 $2.97 €3.23 $3.81 77.9%
Slovenia (SI) €2.22 $2.62 €2.85 $3.36 €3.51 $4.14 81.3%
Spain (ES) €2.80 $3.30 €3.58 $4.23 €4.52 $5.33 79.3%
Sweden (SE) €3.12 $3.67 €4.24 $5.00 €5.61 $6.61 75.5%
United Kingdom (GB) €6.57 $7.75 €8.03 $9.47 €8.77 $10.34 91.6%
Average €3.09 $3.64 €3.95 $4.66 €4.89 $5.76 80.3%

Note: This is part of a map series in which we examine excise taxes in Europe.

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