09/19/2022
New Federal Excise Tax October 1 2022. Please read for more information.Va**ng will cost all of us more after October 1,2022.
Federal Excise Tax October 1 2022
Dear Valued Customer,
As the va**ng industry continues to evolve and grow, the Canadian Federal Government has decided to implement an excise tax on va**ng products that contain va**ng substances with or without ni****ne. As your retailer, please find below some key information that will help you understand this new regulation and how it will impact you.
What is excise tax?
On April 7, 2022, the Federal Government announced excise duty on va**ng products. This excise duty (or excise tax) applies to any va**ng substances sold in Canada that are intended for use in a va**ng device.
All va**ng 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 va**ng products that are intended for sale in the Canadian duty-paid market and remit payments to the Canada Revenue Agency (CRA)
When will the excise tax be implemented?
Effective October 1, 2022, manufacturers and importers of va**ng products sold at retail stores are required to be licensed or registered with the Canada Revenue Agency (CRA).
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 v**e substances sold in our stores (including e-commerce sales) will require a va**ng excise stamp affixed to the product.
How much will the exercise tax increase the prices and how will they be calculated?
The duty is calculated based on the liquid volume of va**ng substance contained in a single container (in ML). At this time, duties are charged and collected on the Federal level.
Federal Taxes Calculations
For the first 10 ML of va**ng substance, a duty is applied at a rate of $1.00 per 2 ML of the va**ng substance.
For each additional 10 ML of va**ng substance thereafter, a duty is applied at a rate of $1.00 per 10 ML of the va**ng substance.
Example 1:
For a closed pod pack (3 pods cartridges), the duty payable will be CAD $1.00 per 2 ML, which equates to an increase of $3.00 per closed pod pack.
Using the example above, the same closed pod pack with 6 ML of va**ng substance with Federal and Provincial/Territorial duties would be $2.00 per 2 ML, which equates to $6.00.
Example 2:
A 60 ML bottle of e-liquid at Federal excise duties would be $1.00 per 2 ML for the first 10 ML, which equates to $5.00. The remaining 50 ML would be $1.00 per 10 ML which equates to another $5.00.
The total federal excise duties would be $10.00.
A 30 ML bottle of e-liquid will be taxed $5.00 on the first 10 ML and then $1.00 for every 10 ML thereafter.
30ML will be $14.38 plus duty tax which is $7.00= $21.38 plus HST = $24.58
60ML will be 23.99 plus duty tax which is $11.00= $34.99 plus HST= $40.23
What products are affected by excise tax?
Va**ng products that are va**ng devices that contain va**ng substances or that are va**ng substances in immediate containers.
Taxed products: closed pods, disposable v**es, e-liquid bottles or bottles containing any component intended for va**ng (ni****ne, VG, PG, flavoring).
How is the total price calculated?
Product price + excise tax + any applicable provincial taxes and the Federal Goods and Services Tax (GST)
What about stores who still sell unstamped products from January 1, 2023 and onward?
The Government is ramping up enforcement and there will be penalties for distributors and retailers who do not comply.
Non-compliant businesses will potentially be charged up to 200% of the duty owed and have the products seized.
