Austria imposes new tax on hemp flowers - see the impact
Administrative court decision imposes tobacco tax on smokable CBD products
Dried hemp flowers with up to 0.3% THC in Austria are now subject to tobacco tax and can only be sold in licensed tobacco shops. According to NewsWeed, the decision was confirmed by the Administrative Court (VwGH), which deemed the products to fall under the definition of smoking items.
Court reinforces taxation on CBD flowers
The case began when an importer challenged the application of tobacco tax to hemp flowers, arguing that they were not tobacco products. However, the Federal Finance Court rejected the appeal, stating that these products could be smoked without further industrial processing.
The VwGH reinforced this stance, emphasizing that the decision is in line with Directive 2011/64/EU, which allows for the taxation of substances used for smoking, even if they do not contain tobacco. The Constitutional Court of Austria also refused to review an appeal against the measure, making the new rule final.
Impacts on the CBD industry
The decision brings significant changes to the CBD industry in Austria. Now, smokable hemp flowers can only be sold by licensed tobacco shops, restricting the operations of specialized stores and online commerce.
Furthermore, the application of a 34% tobacco tax may raise prices and reduce consumer demand, limiting market expansion. The impact of the measure could also resonate in other European countries, such as Belgium, where similar taxes already affect the CBD industry.