Smokeless Tobacco Products – Permits

QUESTION
How will the legal regulation of trade in smokeless tobacco products change as of 1 February 2025? Is it necessary to have any permits?

ANSWER:
On 1 February 2025, the amendment to Act No. 106/2004 Coll. on Excise Duty on Tobacco Products (hereinafter “EDTPA”), Act No. 233/2024 Coll., enters into force in its provisions concerning the legal regulation of smokeless tobacco products.

Since 27 September 2024, under the EDTPA, in addition to tobacco products themselves, tobacco raw materials, smokeless tobacco products (STP) and products related to tobacco products have also been subject to taxation (§ 1 and § 4(8) EDTPA).

Definition of Smokeless Tobacco Product (STP)

Under § 19aa(1) EDTPA, a “smokeless tobacco product” means:

“a product containing tobacco, which is not consumed by burning, which is—

  • capable of being used for inhalation without burning by means of a heating device, or
  • chewing tobacco, or
  • snuff tobacco.”

Under § 19ab(1) EDTPA, a “product related to tobacco products” means:

  • Refill for an electronic cigarette – a liquid:
    a) containing nicotine, which can be used in an electronic cigarette or to refill it, or
    b) not containing nicotine, which can be used in an electronic cigarette or to refill it;
  • Nicotine pouch – a product containing nicotine and not containing tobacco or genetically modified tobacco, not consumed by burning or inhalation, and intended for oral use by sucking, chewing, or otherwise;
  • Another nicotine product that is not a smokeless tobacco product – i.e., a product which:
    • does not contain tobacco,
    • contains nicotine,
    • is not a refill for an electronic cigarette or a nicotine pouch.

Trade in STP

Under § 19aa(9) EDTPA:

“A person who wishes, in the course of business within the tax territory, to trade in STP must apply to the customs office for a permit to trade in STP, except for direct sales of STP under a special regulation. STP may be traded only on the basis of a permit to trade in STP.”

The application for a permit to trade in STP must include:

  • the general particulars under § 67(2) of Act No. 563/2009 Coll. on Tax Administration (Tax Code), and
  • the specific particulars under § 19aa(8)(a)–(c) EDTPA, namely:
    • the address of the applicant’s place of business if different from the registered office or permanent residence,
    • the exact designation of the STP under paragraph 1 or 2 with which the applicant wishes to trade,
    • a list of STP suppliers.

The application must be accompanied by:

  • a document proving the right to conduct business not older than 30 days, or a certified copy thereof, if the applicant has no registered office or permanent residence within the tax territory.

In practice, when handling such permits for clients, we also attach:

  • an inventory summary,
  • a statutory declaration (scan, notarisation not required) stating that the applicant keeps accounts in accordance with the Accounting Act, specifying who keeps the accounts, together with one page from the general ledger or registry log, and possibly also a copy of the contract with the accountant.

Distribution of STP

Under § 19aa(17) EDTPA:

“A person who wishes, in the course of business within the tax territory, to distribute STP must apply to the customs office for a permit to distribute STP. STP may be distributed only on the basis of a permit to distribute STP.”

The application for a permit to distribute STP must contain the same particulars as the application for a permit to trade in STP (§ 19aa(18) EDTPA).

Trade in RTTP

Under § 19ab(8) EDTPA:

“A person who wishes, in the course of business within the tax territory, to trade in RTTP must apply to the customs office for a permit to trade in RTTP, except for direct sales of RTTP under a special regulation. RTTP may be traded only on the basis of a permit to trade in RTTP.”

The application for a permit to trade in RTTP must include:

  • the general particulars under § 67(2) of the Tax Code, and
  • the specific particulars under § 19ab(8)(a)–(c) EDTPA, namely:
    • the address of the applicant’s place of business if different from the registered office or permanent residence,
    • the exact designation of the RTTP under paragraph 1 or 2 with which the applicant wishes to trade,
    • a list of RTTP suppliers.

The application must be accompanied by:

  • a document proving the right to conduct business not older than 30 days, or a certified copy thereof, if the applicant has no registered office or permanent residence within the tax territory.

Distribution of RTTP

Under § 19ab(19) EDTPA:

“A person who wishes, in the course of business within the tax territory, to distribute RTTP must apply to the customs office for a permit to distribute RTTP. RTTP may be distributed only on the basis of a permit to distribute RTTP.”

The application for a permit to distribute RTTP must have the same particulars as the application for a permit to trade in RTTP (§ 19ab(20) EDTPA).

Further information can be found on the website of the Financial Administration. Should you require assistance with obtaining the above permits from the customs office, please do not hesitate to contact us.