Manufactured tobacco, according to EU and national legislation, are subject excise duty.
The following products are considered to be manufactured tobacco:

  • Cigarettes
  • Cigars
  • Cigarillos
  • Fine-cut tobacco to be used for rolling cigarettes
  • Snuff and chewing tobacco
  • Other smoking tobacco (pipe tobacco, water pipe tobacco, plant, herbal or fruit-based smoking products: hookah molasses)
  • Heated Tobacco

In order to be marketed in Italy, manufactured tobacco must be previously authorised by the Customs and Monopolies Agency, by entering them in the relevant sale rates, or by registration in the case of heated tobacco.

The application for entry or registration must be submitted by the legal representative of the manufacturer or importer to the Customs and Monopolies Agency with jurisdiction over the matter, in accordance with a specific procedure.

The application must contain the following informations:

  • details of the applicant (state whether manufacturer, importer or representative);
  • type of product based on the definitions given in Articles 39-bis and 39-ter of Legislative Decree No 504/1995 (cigarettes, cigars, cigarillos, fine-cut tobacco for rolling cigarettes, other smoking tobacco, snuff or chewing tobacco, heated tobacco), brand name, which must correspond to the name appearing on the packaging sold to the public;
  • EU-CEG code allocated to the product to be registered and issued by the Common Entry Gate - EU-CEG;
  • documents certifying registration of the trade mark;
  • name of one or more tax warehouse keepers who distribute the products;
  • characteristics of the packaging (number of units for pack if the product consists of cigarettes, cigars, cigarillos or heated tobacco, or weight in grammes if another type of processed tobacco);
  • samples of packaging, in the form of drawings and packs;
  • product characteristics (technical data sheet containing the relevant specifications):
    • for cigarettes: nicotine, tar and carbon monoxide emission levels, total length, length of tipping paper, length of filter, gauge, weight of the cigarette and weight of the cut tobacco, etc.;
    • for cigars and cigarillos: total length, type, weight without filter or mouthpiece and mass with filter or mouthpiece, type of wrapper (natural/reconstituted), type of binder, if any. For cigars and cigarillos with wrapper made of reconstituted tobacco, also specify the measurable circumference over at least one third of the length;
    • for fine-cut tobacco for rolling cigarettes, percentage by weight of tobacco particles with a cut length of less than 1.5 mm (more than 25% by weight);
    • for heated tobacco, the sheet containing the technical specifications of the product to be registered and the "EU declaration of conformity", which certifies the conformity of the Device to all the essential requirements of the European Union directives applicable for “CE” marking.
  • retail price per minimum packaging unit for sale to the public and for:
    • conventional kilogramme (equal to 1000 cigarettes, 200 cigars, 400 cigarillos and 1000 units for heated tobacco);
    • 1000 grammes for fine-cut tobacco for rolling cigarettes, other smoking tobacco, snuff or chewing tobacco.

The application should also be accompanied by a sample of the product, to be subjected to the laboratory analyses established by law, which varies depending on the category (at least: 800 grammes for cigarettes, five units for cigars, 40 units for cigarillos, 200 grammes for fine-cut tobacco for rolling cigarettes and for other smoking tobacco, snuff or chewing tobacco, 800 heated tobacco sticks together with 4 Device).

For the purposes of marketing of the product, once entered in the relevant sale rates or registered, in the case of heated tobacco, the Agency assigns a specific unique code to each product and to each type of packaging.

The retail price at which manufactured tobacco is sold to the public is set by the Customs and Monopolies Agency in accordance with that established by the manufacturers or importers.

The Customs and Monopolies Agency also enters the public sale prices of tobacco products in the break-down tables, divided by product type. These show the individual items making up the price, i.e.:

  • Excise duty
  • VAT
  • Premium
  • Supplier’s share

For cigarettes, unlike other manufactured tobaccos, excise duty corresponds with the sum of a fixed component and a proportional one to the retail selling price; the components are calculated in accordance with a base rate set at 59.8%.

Value added tax (VAT) is calculated net of the tax itself, and therefore amounts to 18.03% of the retail price.

A minimum tax burden (VAT + excise duty) is also set for cigarettes. This amounts to EUR 193,21 per conventional kilogram/1000 cigarettes in 2021. This means that all products falling within a price range of less than or equal to EUR 247.00 are subject to the payment of this minimum total amount for the two taxes applied.

The premium payable to the retailer (tobacconist) amounts to 10% of the retail price.

The producer’s remuneration, which also includes distribution costs, is the difference between the retail price and amounts made up of the excise duty, VAT and premium.

For cigars, the excise duty is calculated by applying the basic rate of 23,5% to the retail price.

A minimum excise duty of EUR 35.00 per conventional kilogram/200 cigars is set. This means that all products falling within a price range of less than or equal to EUR 148.00 are subject to the payment of this required minimum total amount.

For cigarillos, the excise duty is calculated by applying the basic rate of 24% to the retail price.

A minimum excise duty of EUR 37.00 is set per conventional kilogram/400 cigarillos. This means that all products falling within a price range of less than or equal to EUR 154.00 are subject to the payment of this required minimum total amount.

For fine-cut tobacco to be used for rolling cigarettes (RYO), the excise duty is calculated by applying the basic rate of 59% to the retail price. A minimum excise duty of EUR 130.00 per kilogram is set. This means that all products falling within a price range of less than or equal to EUR 220.00 are subject to the payment of this required minimum total amount.

For snuff and chewing tobacco, the excise duty is calculated by applying the basic rate of 25.28% to the retail price.

Per other smoking tobacco (pipe tobacco, water pipe tobacco, plant, herbal or fruit-based smoking products: hookah molasses the excise duty is calculated by applying only the basic rate of 56.5% to the retail price.

For Heated Tobacco (new generation ‘heat-not-burn’ products), the excise duty is 30% of the excise duty on an equivalent quantity of cigarettes.

The calculation based on specific technical procedures, defined by order of the Director of the Customs and Monopolies Agency, is based on the consumption equivalent of cigarettes to heated tobacco.

The value-added tax (VAT), premium and share payable to the producer are calculated using the same criteria applied to cigarettes.

Importers of manufactured tobacco from outside the EU are also required to pay the relevant duty.

The supply chain is made up of the following actors:

  • tax warehouse keepers hold the products, where excise duty has not been paid;
  • monopoly goods retailers are the entities involved in the retail sale of products.

Tobacco products may be distributed within Italy only through tax warehouses authorised by the Agency supplying the official network, made up of tobacco shops.

Tobacco shops, which carry out a genuine public service on behalf of the State, carry out retail sales activities on the basis of a specific concession or, in the case of temporary licences (patentini), an authorisation issued by the Agency after submission of the relevant application and verification of the subjective and objective requirements necessary for managing a local sales outlet.

An entity intending to set up a tax warehouse submits an application for authorisation to set up a tax warehouse for manufactured tobacco to the Customs and Monopolies Agency in accordance with established procedure, providing, inter alia, an appropriate security to guarantee excise duties on manufactured tobacco held in the tax warehouse and the movement of manufactured tobacco throughout the European Union under duty suspension arrangements.

The tax warehouse keeper, who also acts as the entity liable to pay the tax, which becomes payable when the product is released for consumption, reports the list of tobacconists to the Agency on a monthly basis and provides for the payment of excise duty on manufactured tobacco released for consumption. The payments take place fortnightly and refer to the previous fortnight.

Manufactured tobaccos are exempt from payment of excise duty when they are:

  1. denatured and used for industrial or horticultural purposes;
  2. destroyed under administrative supervision;
  3. intended exclusively for scientific tests and trials relating to product quality;
  4. reused by the producer.

Last update: 12-12-2020