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Federal Government is implementing Excise Tax on Vaping Products.

An excise duty on vaping products, as announced in Budget 2022, is being implemented on October 1st 2022 through the introduction of a new excise duty framework. The excise duty applies to vaping substances that are manufactured in Canada or imported and that are intended for use in a vaping device in Canada.

The tax is $1 per 2ml for the first 10ml in any sealed container (bottle, pod, etc.), and $1 per 10ml for additional liquid in the container. That would add $7 to the price of a 30ml bottle of E-Liquid. A 3-Pack of 2ml pods would be taxed at $3, because each sealed pod is taxed separately and the minimum tax on any individual container is $1.

FEDERAL EXCISE TAX ON VAPING PRODUCT

What is Excise Tax?

On April 7 2022, the Federal Government announced excise duty on vaping products, This excise duty (or excise tax) applies to any vaping substances sold in Canada that are intended for use in a vaping device.

All vaping products that are meant for sale in the Canadian duty-paid market are required to have an excise stamp affixed to the product as proof that the duties have been paid. Canadian manufacturers and importers are responsible for applying excise stamps to vaping products that are intended for sale in the Canadian duty-paid market and remit payments to the Canada Revenue Agency (CRA)

When Was The Excise Tax Implemented?

Effective October 1st 2022, manufacturers and importers of vaping products sold at retail stores are required to be licensed or registered with the Canada Revenue Agency (CRA)

For retailers, the excise tax regulations came in effect on January 1st 2023.

What products are affected by excise tax?

• Taxed Products: Closed pods, Disposable Vapes, E-Liquid Bottles, or bottles containing any component intended for vaping (Nicotine, VG, PG, Flavouring)
• Products That Will Not Be Taxed: Device/Battery for closed pod systems and any vape hardware or mods (including chargers, empty cartiges, tanks, and other accessories).