Luxembourg to tax CBD cannabis like tobacco from December 1

While the sale of CBD cannabis is fully permitted in Luxembourg (as in most European countries), it is currently subject to the standard VAT rate of 17% for sales in Luxembourg.

Change Starting December 1, all cannabis-derived products containing less than 0.3% of THC that can be smoked or vaporized will be subject to excise tax, just as tobacco products or cigarettes are. This therefore applies to:

• hemp flowers or parts of the plant that can be smoked or vaporized
• hemp resin
• cigarettes made exclusively from hemp

Herbal tea blends—marketed and packaged as such, with a high proportion of hemp leaves—will be exempt from excise taxes and VAT collected at the source.

For «other cannabis-based tobacco products,» the taxes break down as follows:

• an ad valorem excise tax of 31.15% of the retail price listed on the tax label and
• a special excise tax of 16.5€ per kilogram

For «hemp cigarettes,» the taxes break down as follows:

• an ad valorem excise tax of 46.65% of the retail price listed on the tax stamp and
• a special excise tax of 18.8914€ per 1,000 cigarettes

VAT at 17% must be added for the end consumer.

Luxembourg is following the Belgian legislation that taxes CBD cannabis in the same way. Not surprisingly, the Belgian law of April 3, 1997, concerning the tax regime for manufactured tobacco products being executed in the Grand Duchy of Luxembourg.

The Luxembourg has also announced that it will legalize cannabis by 2022.