Navigating German tax laws for tea stick products.

What are tea sticks?

Tea sticks for tobacco heaters, known in Germany as ‘Teesticks’, are products that resemble tobacco sticks but contain tea or other plant components instead of tobacco. These sticks are intended for consumption using a device specifically designed for this purpose, often referred to as heat-not-burn products.

Tea sticks and German tobacco tax

Under German tobacco tax law, tea sticks are classified as taxable items. However, the specific tax rate depends on how the product is classified.

Classifying tea sticks for tax purposes

The key factor in determining the tax classification of a tea stick is how it is intended to be consumed. This distinction is crucial for proper taxation and compliance with German regulations.

• Tea sticks as cigarettes: If a tea stick can be smoked directly without a heating device, it's classified as a cigarette under German tobacco tax law according to Section 1(2)(2)(a) TabStG in conjunction with Section 1(8) TabStG and Section 1(1) TabStG.

• Tea sticks as heated tobacco: If a tea stick requires a special heating device to be consumed (due to an aluminium coating or other additives), it falls under the category of heated tobacco for tax purposes. This category is governed by Section 1(2)(3) TabStG in conjunction with Section 1(2a) TabStG, Section 1(8) TabStG, and Section 1(1) TabStG.

Important considerations for tea stick producers: tea stick tax assessment

Before launching a tea stick product in Germany, it's crucial to have it assessed under tobacco tax law. This involves informing the relevant customs office and providing prototypes or product samples for evaluation under German tobacco tax law. If there's any uncertainty about the tax classification, the customs office can refer the matter to a specialised department (the Directorate General of Customs, Directorate IX or Technical Unit 3) for further analysis.