What changed between the draft committee report and the plenary report

Article 2 – paragraph 1 – point b: (b) cigars and cigarillos;

Article 2 – paragraph 1 – point c: deleted

Article 2 – paragraph 1 – point d – point i a (new): (ia) waterpipe tobacco

Change 9

Removed:For explanation see the justification for amendment 27.

Article 2 – paragraph 1 – point e: deleted

Change 10

Removed:For explanation see the justification for amendment 27.

Added:Article 2 – paragraph 3: 3. For the purposes of this Directive, ‘raw tobacco’ means any form of harvested and dried tobacco that has undergone an initial processing stage.

Added:Article 2 – paragraph 5: 5. Products containing no tobacco and used exclusively for medical purposes and authorised, where required, by a competent Union or national authority, shall not be treated as manufactured tobacco or tobacco related products .

Added:Article 3 – paragraph 1 – point a: (a) rolls of tobacco which are intended to be smoked through a combustion process as they are and which are not cigars or cigarillos within the meaning of Article 4(1);

Added:Article 3 – paragraph 1 – point b: (b) rolls of tobacco which are intended to be smoked through a combustion process which, by simple non-industrial handling, are inserted into cigarette-paper tubes, or

Added:Article 3 – paragraph 1 – point c: (c) rolls of tobacco which are intended to be smoked through a combustion process which, by simple non-industrial handling, are wrapped in cigarette paper.

Added:Article 4 – paragraph 1 – introductory part: 1. For the purposes of this Directive, the following shall be deemed to be cigars or cigarillos if they can be and, given their properties and normal consumer expectations, are exclusively intended to be smoked through a combustion process as they are:

Article 4 – paragraph 2: deleted

Change 11

Removed:This paragraph became obsolete due to the deletion of the split of cigars and cigarillos, which the Commission proposed. The rapporteur does not see merit in splitting cigars and cigarillos as they are taxed equally anyway. The rapporteur proposes to have one single „cigars and cigarillos“ category and therefore the maximum weight of 3 g is not necessary anymore.

Added:Article 5 – paragraph 1 – point a: (a) tobacco which has been cut or otherwise split, twisted or pressed into blocks and is intended to be smoked through a combustion process without further industrial processing;

Change 12

Changed:Article 5 – paragraph 1 – point b: (b) tobacco refuse put up for retail sale which does not fall under ArticlesArticle 3(1), Article 4(1), Article 7(1) and Article 8 and which canis intended to be smoked.smoked through a combustion process. For the purpose of this Article, tobacco refuse shall be deemed to be remnants of tobacco leaves and by-products obtained from tobacco processing or the manufacture of tobacco products.

Change 13

Removed:This is a technical clarification specifying that tobacco refuse can be considered smoking tobacco only if it does not fall under the definitions of cigarettes, cigars/cigarillos, heated tobacco or other manufactured tobacco.

Added:Article 5 – paragraph 2 a (new): 2a. Smoking tobacco which is sold or intended to be sold for use in a waterpipe for the production of emissions which are passed through a liquid before inhalation by the users shall be deemed to be waterpipe tobacco.

Removed:Article 5 – paragraph 2 a (new): 2a. Smoking tobacco which is sold or intended to be sold for use in a waterpipe for the production of emissions which are passed through a liquid before inhalation by the users shall be deemed to be ‘waterpipe tobacco’.

Removed:The definition of ‘waterpipe tobacco’ has been revised and relocated. Specifically, the word “can” has been replaced with “sold or intended to be sold” to close an existing loophole explained below. Having ‘waterpipe tobacco’ as a separate category (Commission version) creates a potential issue: virtually all smoking tobacco could be classified as waterpipe tobacco whenever it is physically possible to use it in a waterpipe, regardless of the manufacturer’s intended purpose. Since the proposed minimum tax rate for waterpipe tobacco is lower than the rate for other smoking tobacco and for fine-cut tobacco for the rolling of cigarettes, this creates a significant risk for tax administrations. Manufacturers and importers could claim that their products “can” be used in a waterpipe — even when this is not their intended or primary use — and thereby qualify for the lower tax rate. Therefore, we adapted the definition and put waterpipe tobacco under ‘smoking tobacco´ to close this loophole.

Article 6: deleted / (deleted) / (deleted) / (deleted) / (deleted)

Change 14

Removed:See justification for amendment 16 (moved and adjusted definition of waterpipe tobacco).

Added:Article 7 – paragraph 1: 1. For the purposes of this Directive, ‘heated tobacco’ means tobacco that is heated or otherwise activated by chemical reaction or some other means to produce an emission containing nicotine or other chemicals, which are intended for inhalation by users as they are, without combustion, other than via a waterpipe as referred to in Article 6(1).

Change 15

Changed:Article 7 – paragraph 1:1 1.a For(new): the1a. purposesWhere heated tobacco is taxed per item in accordance with Article 20(1), point (b), an item of heated tobacco referred to in paragraph 1 of this Directive,Article ‘heatedshall, tobacco’for meansexcise duty purposes, be considered to be two items where the tobacco thatcontent is heated orhigher otherwisethan activated0,45 bygrams chemicalbut reactionnot orhigher somethan other0,75 meansgrams, to producebe anthree emissionitems containingwhere nicotinethe ortobacco othercontent chemicals,is intendedhigher forthan inhalation0,75 bygrams users,but othernot higher than via1,05 agrams, waterpipeand asto referredbe toone inadditional Articleitem 5(2a).for each 0,3 grams of tobacco content starting at 1,05 grams.

Change 16

Changed:Article 7 – paragraph 12 a (new): 1a. If heated tobacco is taxed per item in accordance with2a. ArticleProducts 20(1),which pointfall (b),under anthe itemdefinition of heated tobacco referredlaid todown in paragraph 1 of this Article shall, forand excisewhich dutycan purposes,also be considereddeemed to be two items where the tobacco contentcigarettes isas higherdefined thanin 0,45Article grams3, butor notcigars higheror thancigarillos 0,75as grams,referred to bein threeArticle items4, whereor thesmoking tobacco content isas higherdefined thanin 0,75Article grams5, butshall notbe highersubject thanin 1,05each grams,Member andState to bewhichever oneexcise additionalduty itemis forhigher eachin 0,3accordance gramswith ofthe tobacconational contentlaw startingof atthat 1,05Member grams.State.

Change 17

Removed:We want to make sure that the new minimum excise duty rates are not circumvented by making the heated tobacco "sticks" or items larger/heavier and still taxing them as one item. The Commission's impact assessment mentions that the average weight of a heated tobacco stick is around 0.3g (page 101), we therefore established the following thresholds to ensure fair taxation of potential larger sticks.

Added:Article 7 – paragraph 3: deleted

Added:Article 7 – paragraph 4: deleted

Added:Article 7 – paragraph 5: deleted

Added:Article 9 – paragraph 1 – point a: (a) liquids containing nicotine but not tobacco that can be used in electronic cigarettes or similar vaporising devices or to refill electronic cigarettes or similar vaporising devices;

Added:Article 9 – paragraph 1 – point b: (b) liquids not containing nicotine or tobacco which are intended to be used in electronic cigarettes or similar vaporising devices or to refill electronic cigarettes or similar vaporising devices.

Article 9 – paragraph 2: 2. For the purposes of this Directive, ‘electronic cigarette’ means a product that can be used for consumption of vapour, or any component of that product that can be disposable or refillable, or rechargeable.

Change 18

Removed:The objective here is to close a potential loophole and to make the definition as broad as possible.

Added:Article 10 – paragraph 1: 1. For the purposes of this Directive, ‘nicotine pouches’ means products containing nicotine but not tobacco intended for oral intake, or plant fibres or equivalent substrate, which are presented in sachet portions or porous sachets or in an equivalent format and which do not contain tobacco.

Change 19

Changed:Article 10 – paragraph 1:2: 1.2. For the purposes of this Directive, ‘nicotine‘other pouches’nicotine products’ means products for human consumption containing nicotine intendedand not containing tobacco which can be used for oralthe intake andof vegetablenicotine fibresin orthe equivalenthuman substrate,body, whichother arethan presentednicotine pouches as defined in sachetparagraph portions1 orof porousthis sachetsArticle orand inheated antobacco equivalentas formatdefined in Article 7(1) and whichliquids dofor notelectronic containcigarettes tobacco.as defined in Article 9(1).

Change 20

Removed:The objective is again to close a potential loophole. The producer could theoretically not mix the ingredients and instruct the consumer to mix them just before the use, thus escaping the definition of nicotine pouches as a taxable product. We therefore suggest to delete the reference to the mixing.

Added:Article 11 – paragraph 1: A natural or legal person established in the Union who manufactures a tobacco or tobacco related product or has such a product designed or manufactured and markets that product under his name or trademark shall be deemed to be a manufacturer.

Change 21

Changed:Article 12 – paragraph 2: 2. The Union rate used to determine the minimum tax level of a product, as provided for in Article 16, Article 20(2) and Article 22(2) shall be adjusted by increasing or decreasing the base amount in euro by the percentage change over the preceding 3 calendar years in the all-items annual Union average value of the harmonised index of consumer prices excluding energy and unprocessed food as published by Eurostat. The Union rate used to determine the minimum tax level of a product shall not be adjusted by more than 129 %.

Change 22

Removed:For details regarding core inflation see recital 13. The cap of the maximum adjustment by 12 % aims to make the adaptations of the minimum rates more predictable and less volatile.

Added:Article 12 – paragraph 3: 3. The part of minimum rate expressed as an amount either per kilogram, per millilitre, or per a given number of items applicable in a Member State shall be the sum of two thirds of the Union rate for the corresponding category multiplied by the price level index divided by one hundred plus one third of the Union rate for the corresponding category. Price level index means the index published by Eurostat expressing the price level of a given Member State for actual individual consumption relative to the weighted Union average. Member States shall use the price level index of the year prior to the year of adjustment.

Removed:Article 12 – paragraph 3: 3. The part of minimum rate expressed as an amount either per kilogram, per millilitre, or per a given number of items applicable in a Member State shall be the sum of one half of the Union rate for the corresponding category multiplied by the price level index divided by one hundred plus one half of the Union rate for the corresponding category. Price level index means the index published by Eurostat expressing the price level of a given Member State for actual individual consumption relative to the weighted Union average. Member States shall use the price level index of the year prior to the year of adjustment.

Added:Article 12 – paragraph 4 a (new): 4a. For calculating the adjustment under paragraphs 1, 2 and 4, the following formula shall apply: / where: y is the first year the adjusted rate shall apply, and HICP is the harmonised index of consumer prices.

Removed:We believe that the price level index is a useful tool for making the minimum rates fairer across Member States with very diverse economic situations. Therefore, it should be enhanced and its weight in the calculation of the final minimum rate should be increased from one third to one half.

Added:Article 12 – paragraph 5: deleted

Removed:Article 12 – paragraph 5: 5. The Commission is empowered to adopt each year by 28 February delegated acts in accordance with Article 31 to amend the minimum Union rates laid down in Article 16, Article 20(2) and Article 22(2) in such a manner that they reflect the adjustment made in accordance with paragraph 2 of this Article. Member States shall apply the new minimum tax levels from 1 January of the year following that of the adoption of the respective delegated act.

Article 12 – paragraph 6: 6. Paragraph 2 shall apply from 1 January 2036.

Change 23

Removed:The indexation of minimum tax rates at EU level is a completely new element that futureproofs the Directive but which also adds complexity for Member States' tax authorities. Therefore, we decided to apply the provision on indexation (par. 2) after the end of the transitional period and subsequent 3 calendar year period.

Added:Article 16 – paragraph 1: The overall excise duty on cigarettes shall represent at least 60 % of the weighted average retail selling price of cigarettes released for consumption. That excise duty shall not be less than the Union rate of EUR 200 per 1000 cigarettes, adjusted in accordance with Article 12, irrespective of the weighted average retail selling price.

Change 24

Changed:Article 16 – paragraph 1:2: TheHowever, overallMember exciseStates dutywhich onlevy cigarettesan shallexcise representduty of at least 60the %Union rate of EUR 250 per 1000 cigarettes, adjusted in accordance with Article 12, on the basis of the weighted average retail selling price of cigarettesneed releasednot forto consumption.comply Thatwith excisethe dutyrequirement shallof notan beoverall lessexcise thanduty theof Union60 rate% of EURthe 215weighted peraverage 1000retail cigarettes,selling adjustedprice inof accordancecigarettes withreleased Articlefor 12,consumption irrespectiverequirement ofset out in the weightedfirst averagesubparagraph retailof sellingthis price.Article.

Change 25

Removed:For some Member States, the 63 % objective is not achievable. Given the lack of transitional period for cigarettes, it is necessary to decrease the percentage to 60 %.

Removed:Article 16 – paragraph 2: However, Member States which levy an excise duty of at least the Union rate of EUR 274 per 1000 cigarettes, adjusted in accordance with Article 12, on the basis of the weighted average retail selling price need not to comply with the requirement of an overall excise duty of 60 % of the weighted average retail selling price of cigarettes released for consumption requirement set out in the first subparagraph of this Article.

5 unchanged paragraphs

Article 19 – paragraph 1 – point a: (a) cigars and cigarillos;

Article 19 – paragraph 1 – point b: deleted

Article 19 – paragraph 1 – point c: deleted

Article 19 – paragraph 1 – point d: (d) smoking tobacco, including: / (i) fine-cut tobacco for the rolling of cigarettes; / (ii) waterpipe tobacco; / (iii) other smoking tobacco;

Article 19 – paragraph 1 – point e: deleted

Change 26

Removed:Article 20 – paragraph 4: 4. By way of derogation from paragraph 2, from 1 January 2028 until 31 December 2030 Member States shall ensure that excise duty rates are at least EUR 12 per 1 000 items or per kilogram or 5% of the retail selling price inclusive of all taxes for cigars and cigarillos, at least EUR 22 per kilogram or 20% of the retail selling price inclusive of all taxes for other smoking tobacco and waterpipe tobacco, at least EUR 58 per 1 000 items or EUR 83 per kilogram or 20 % of the retail selling price inclusive of all taxes for heated tobacco, and at least EUR 0 per kilogram or 0% of the retail selling price inclusive of all taxes for other manufactured tobacco.

Added:Article 20 – paragraph 1 – subparagraph 1 – point b: (b) a specific duty expressed as an amount per kilogram or, in the case of cigars and cigarillos, and heated tobacco, alternatively for a given number of items; or

Removed:The transition period is prolonged by one year. To arrive at the desired final rates for heated tobacco products as laid out in the table in Art. 20 par. 2, the rates applying during the transitional period have been adapted accordingly.

Added:Article 20 – paragraph 4: 4. By way of derogation from paragraph 2, from 1 January 2028 until 31 December 2031 Member States shall ensure that excise duty rates are at least EUR 12 per 1 000 items or per kilogram or 5% of the retail selling price inclusive of all taxes for cigars and cigarillos, at least EUR 22 per kilogram or 20% of the retail selling price inclusive of all taxes for other smoking tobacco and waterpipe tobacco, at least EUR 58 per 1 000 items or EUR 83 per kilogram or 20 % of the retail selling price inclusive of all taxes for heated tobacco, and at least EUR 0 per kilogram or 0% of the retail selling price inclusive of all taxes for other manufactured tobacco.