Nicotine products without tobacco or liquids will be taxed under the Liquid Tax

The tax classification of new nicotine consumption formats has generated uncertainty regarding which tax should apply to those products that do not fit into the traditional categories of tobacco or liquids for electronic cigarettes.

What the DGT has resolved

After analyzing the nature of so-called nicotine 'sticks', the Dirección General de Tributos (DGT) has determined that these products cannot be considered tobacco products, as they contain neither tobacco nor herb leaves. Likewise, the administration has ruled out their classification as liquids for electronic cigarettes or as nicotine pouches.

However, as they are products intended for final consumption that contain nicotine but lack the characteristic plant raw material of tobacco, the binding body establishes that they are included within the objective scope of the Tax on Liquids for Electronic Cigarettes and other Tobacco-related Products. Specifically, they fall under the definition of 'other nicotine products'.

What this means for you

This resolution has a direct impact on manufacturers and distributors of nicotine products operating with innovative formats. If your catalog includes products that are neither liquids nor nicotine pouches, you must settle the specific tax corresponding to the 'other nicotine products' category.

The DGT's determination clarifies the tax base and the applicable tax rate, preventing errors in settlement that could lead to sanctions or requirements from the Administration in accordance with Law 38/1992 on Excise Duties and the General Tax Law.

What should be done

Companies in the sector should conduct a technical analysis of their product catalog to ensure that the tax classification is correct. It is necessary to verify whether the composition of your products fits into the 'other nicotine products' category to comply with the tax settlement obligations. It is recommended to assess the particular situation of each product and its chemical composition to determine the exact tax treatment and avoid contingencies before the Administration.