NEW CANADIAN VAPE EXCISE TAX
Coming October 1st
What does this new tax mean for you?
While Health Canada is busy concocting its next attack on the vaping industry, the Canadian Government has decided to implement an excise tax on vaping products that contain vaping substances with or without nicotine. Please find some key information below that will help you understand this new federal tax and how it will impact your future purchases of eJuice, pre-filled pods, and disposables starting this fall.
When did this happen?
On April 7, 2022, the Federal Government announced a new excise tax on vaping substances sold in Canada that are intended for use in a vaping device (i.e. Manufactured eJuice, VG, PG and Nicotine Base). The regulations around this excise tax started to be communicated to vape shops, distributors, and manufacturers in late July and most details around manufacturing and importation stamping and surety bond requirements had not yet been disseminated to the industry by the Canada Revenue Agency (CRA) until late August.
We have spent the better part of the last month speaking with our contacts at Canada Revenue Agency to ensure that our manufacturing, distribution and retail business was fully prepared for the excise tax implementation, and wanted to share some specifics with you.
What is excise tax?
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 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 directly to the Canada Revenue Agency (CRA) at the time of manufacture or import.
When will the excise tax be implemented?
Effective October 1, 2022, manufacturers and importers of vaping products sold at retail stores are required to be licensed or registered with the Canada Revenue Agency (CRA) and pay excise tax on all newly manufactured or imported vaping substances.
For retailers, the excise tax regulations will come into effect on January 1, 2023. As a retailer, we have a grace period to sell unstamped products until December 31, 2022. Starting January 1, 2023, all products containing vaping substances sold in our store (including e-commerce sales) will require a vaping excise stamp affixed to the product. Premium eJuice will continue to sell unstamped products that were already in our inventory as of October 1st until mid December while supplies last. Once we have sold out of unstamped bottles of a particular SKU, we will adjust the price of the item to incorporate the new excise tax that will be applied to new stock acquired from that point forward. Our full transition to only excise-stamped products will be completed by December 23rd, 2022.
How much will the excise tax increase prices, and how will they be calculated?
The duty/tax is calculated based on the liquid volume of the vaping substance contained in a single container (in mL). At this time, taxes/duties are charged and collected at the Federal level.
Federal Excise Taxes Based On Container Size
3 x 2mL pods = $3
4 x 1mL pods = $4
10mL disposable = $5
30mL bottle of eJuice = $7
60mL bottle of eJuice = $10
100mL bottle of eJuice = $14
120mL bottle of eJuice = $16
Excise Tax Calculations
- For the first 10mL of vaping substance, a tax/duty is applied at a rate of $1.00 per 2mL of the vaping substance.
- For each additional 10mL of vaping substance thereafter, a tax/duty is applied at a rate of $1.00 per 10mL of the vaping substance.
For a pack of pre-filled pods (3 x 2mL pods), the duty payable will be CAD $1 per 2mL, which equates to an increase of $3 per pack.
The tax/duty payable on a 60mL bottle of e-liquid would be $1 per 2mL for the first 10mL, which equates to $5. The remaining 50mL would be $1 per 10mL which equates to another $5.
Potential for additional taxation:
It is important to note that the Government has invited the Provinces and Territories to participate. In the event that the Provinces or Territories opt into the excise tax, a new Provincial/Territorial stamp will need to be applied on all products and the duty payable will effectively double.
Frequently Asked Questions
What products are affected by excise tax?
- Vaping devices that contain vaping substances (i.e. disposables)
- Vaping substances in immediate containers (i.e. manufactured pre-filled pods and eJuice bottles as well as DIY components such as vegetable glycerine, propylene glycol and nicotine base)
Bottles of flavouring used for DIY as well as any vaping hardware that is sold separately from the vaping substance will not be impacted by the excise tax.
Will prices increase?
Yes, the total wholesale price and MSRP will increase with the addition of the excise duty.
How is the total price calculated?
Our Canadian Customers: Product price + excise tax + HST/GST
Our International Customers: Product price + excise tax
Will the product and brand offerings remain the same from Premium eJuice?
We are working diligently to continue providing you with our most popular products in their new excise-stamped containers. However, there will be some changes to the brands and products we offer, contingent on their ability to participate in the excise stamping process. More information on these changes will be provided at a later date.
The implementation of excise tax on vaping products will be a transition into the future. As your trusted vape shop, Premium eJuice is putting all resources in place to ensure as smooth of a transition as possible. Please stay tuned for more updates related to the excise tax throughout the coming months. If you have any questions, please feel free to contact us at firstname.lastname@example.org or toll-free at 1-888-516-0288.
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