Austria imposes tobacco tax on CBD flowers«

The Supreme Administrative Court, the Austrian Administrative Court, recently decided that hemp flowers dried plant material containing up to 0.31% THC must be submitted for tobacco tax.

This decision, based on their smoked consumption, will probably have profound implications for the industry of CBD in Austria. In addition to taxation, the decision provides that these products can only be sold by Tabac shops approved under the law on the tobacco monopoly.

Legal basis and judicial procedure

The case, reported by CannabisIndustrie.nl, originated from an importer who challenged the tobacco tax imposed by the customs authorities Austrian. The importer argued that his hemp flowers were not tobacco products. However, the Federal Finance Court (BFG) rejected the appeal, confirming that the products met the definition of smoking products and therefore had to be taxed under the Tobacco Tax Act (TabStG).

The administrative tribunal further strengthened this position, emphasizing that flowers could be used for smoking without industrial transformation additional, an opinion in conformity, according to him, with European legislation (Directive 2011/64/EU), which does not oppose the taxation of these products.

Despite objections from industry stakeholders, the administrative tribunal rejected the appellant’s claim that the TabStG was inconsistent with European law, citing its compatibility with the case law of the Court of Justice of the European Union (CJEU).

In addition, the Constitutional Court refused to hear an appeal contesting the provision of the TabStG which includes the substances other than tobacco within its scope. Given these decisions, the legal possibilities for overturning the judgment appear limited in Austria.

Following this decision, the CBD flowers fumables must now be sold exclusively in the Tabac shops, which will have a significant impact on the distribution channels from CBD shops and online retailers who previously offered these products. The new classification also means that suppliers must adapt their business strategies to remain in compliance with Austrian law.

Beyond the restrictions imposed on retailers, the tobacco tax of 34% applied to these products should drive up prices and make them less accessible to consumers. This could lead to a decrease in demand and limit’Market expansion Austrian.

This decision also raises questions about whether similar decisions might be made in other European countries. In Belgium, for example, taxes on tobacco have already been imposed on comparable products, undermining the Belgian CBD industry.