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V2041-14 28 July 2014 · SG de Impuestos Especiales y de Tributos sobre el Comercio Exterior Criterion in force
OTRO · labores del tabaco

Cut or fragmented tobacco is subject to Tobacco Duties Tax

A taxpayer inquired whether the sale of cut and packaged tobacco leaves is subject to Tobacco Duties Tax. The DGT ruled that while unprocessed leaves are not subject to the tax, cut tobacco that is suitable for smoking is, as it is considered part of the product's manufacture.

The question raised

Obligations relating to the Tobacco Products Tax in connection with the described activity.

The DGT's ruling

Unprocessed tobacco leaf is not subject to the tax, but cut or fractionated tobacco capable of being smoked without further industrial transformation constitutes a tobacco product subject to the tax. Obtaining said product from a non-taxable source is considered manufacturing. Therefore, the activity must be carried out in an authorized factory and requires registration in the Registry of Operators of the Tobacco Market Commissioner.

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