Who must pay
A vaping product licensee who packages vaping products manufactured in Canada on or after October 1, 2022 must pay the applicable vaping duty. The vaping duty is payable at the time of packaging.
A vaping product is considered packaged when it is placed in the smallest package, including any outer wrapper, package, box or other container, in which it is sold to the consumer.
For packaged vaping products that are imported, the person who must pay the applicable vaping duty is the importer, owner, or other person who is liable to pay the duty under the Customs Act. The duty on imported vaping products is payable at the time of importation.
If a vaping product licensee imports unpackaged vaping products for further manufacturing in Canada, they are not required to pay vaping duty at the time of importation.
How to calculate
The excise duty rates on vaping products are outlined in Schedule 8 of the Excise Act, 2001 and are as follows:
For vaping liquids:
- $1 per 2 millilitres (mL), or fraction thereof, for the first 10 mL of vaping substance in the vaping device or immediate container
- $1 per 10 mL, or fraction thereof, for amounts over the first 10 mL
For vaping solids:
- $1 per 2 grams (g), or fraction thereof, for the first 10 g of vaping substance in the vaping device or immediate container
- $1 per 10 g, or fraction thereof, for amounts over the first 10 g
For every vaping product packaged in Canada and intended for the duty paid market, the vaping product licensee who packaged the vaping product must calculate the vaping duty to determine the amount payable to the CRA on their monthly vaping duty and information return.
For vaping products imported into Canada and intended for the duty paid market, the person liable to pay the duty under the Customs Act must calculate the vaping duty to determine the amount payable to the Canada Border Services Agency (CBSA) at the time of importation.
Examples:
1) A package containing 4 pods, with each pod containing 1.5 mL of vaping liquid, attracts $4 of vaping duty ($1 per 1.5 mL pod). It is important to note that the vaping duty is calculated on the quantity of vaping liquid contained in each individual pod, not on the total volume contained in the package.
2) A 30 mL bottle of vaping liquid attracts $7 of vaping duty ($5 for the first 10 mL plus $2 for the next 20 mL).
How to report
For vaping products manufactured in Canada, a vaping product licensee must report and pay (remit) the vaping duty payable using Form B600, Vaping Duty and Information Return. Form B600 and any corresponding duty remittance for a given month (that is, a reporting period) are due by the last day of the calendar month following the reporting period.
The vaping duty payable on vaping products imported into Canada is reported and paid to the CBSA upon importation.
What records to keep
You must keep all records that will support the information you provide on your Form B600. This includes the amount of vaping products manufactured, received, used, packaged, re-worked, sold and disposed of.
You must also be able to support the vaping duty that you reported as payable.
You must keep your records for a period of at least 6 years from the end of the last year to which they relate.
Additional information
If you have further questions, contact your regional excise office. For the contact information of the regional excise offices: Contact Information – Excise Duty, Excise Taxes, Fuel Charge, and Air Travellers Security Charge.
You may email questions to LPVAPINGG@cra-arc.gc.ca or call 1-866-330-3304.