On the introduction of excise tax on nicotine-containing products for oral use and their differentiation as separate types of nicotine-containing products for oral use from September 1, 2024

Sale of goods produced in Ukraine/imported to the customs territory of Ukraine under code according to the Ukrainian classification of the foreign activity products 2404 91 90 00 "Other nicotine-containing products for oral use", which are included in the list of excisable products, are subject to the excise tax accordingly to provisions of the Law of Ukraine № 3553-ХХ as of 16.01.2024 "On amendments to the Tax Code of Ukraine on bringing some standards into compliance with the Law of Ukraine "On the customs tariff of Ukraine" and clarifying certain provisions" (hereinafter – Law) starting from September 1, 2024.

At the same time, list of excisable products does not include goods of commodity subcategory according to Ukrainian classification of the foreign activity products 2404 91 10 00 "Nicotine-containing products intended to promote cessation of tobacco use".  

In order to prevent emergence of possible threats related to tax evasion due to illegal assignment of nicotine-containing products for oral use to the commodity subcategory according to the Ukrainian classification of the foreign activity products 2404 91 90 00 "Other nicotine-containing products for oral use", which are subject to the excise tax, to the commodity subcategory according to the Ukrainian classification of the foreign activity products 2404 91 10 00 "Nicotine-containing products intended to promote cessation of tobacco use", which are not classified as excisable products, information provided by letters from the Ministry of Health of Ukraine and State Customs Service of Ukraine regarding classification of nicotine-containing products as means of nicotine replacement therapy and those intended to promote cessation of tobacco use, namely:

nicotine replacement therapy is regulated by Order of the Ministry of Health of Ukraine № 746 as of 26.09.2012  "On approval of Methodological recommendations for medical employees of health care institutions for providing medical and preventive care to individuals who wish to get rid of tobacco addiction";

Order of the Ministry of Health of Ukraine № 601 as of 03.08.2012 "On approval and implementation of medical and technological documents on the standardization of medical care for cessation of tobacco products use" approved Standards of primary medical care for cessation of tobacco products use, which includes "Standard 5. Medical assistance in stopping use of tobacco products is carried out comprehensively, with the use of non-pharmacological methods and pharmacotherapy" (hereinafter – Standard 5).

According to the International classification of diseases of the 10th revision, tobacco is classified as a psychoactive substance and, accordingly, disorders resulting from its use are classified as mental and behavioral.

Standard 5 provides for the following obligatory criteria:

for pharmacotherapy, medicinal products with proven effectiveness in terms of their effect are used;

medicines for nicotine replacement and non-nicotine replacement therapy must be prescribed by the medical (pharmaceutical) employee.

Annex 4 to Standards of primary medical care for cessation of tobacco products use defines list of medicines with proven effectiveness that are allowed in Ukraine for use for NRT (nicotine replacement therapy):

nicotine chewing gum, international non-proprietary name (hereinafter – INN) – Nicotine;

nicotine patch, INN – Nicotine.

Medicinal product is any substance or combination of substances (one or more Active pharmaceutical ingredient and excipients) that has properties and intended for treatment or prevention of diseases in humans, or any substance or combination of substances (one or more Active pharmaceutical ingredient and auxiliary substances), which may be intended to prevent pregnancy, renew, correct or change physiological functions in a person through pharmacological, immunological or metabolic action or to establish medical diagnosis (Clause 2 of Part 1 Article 2 of the Law of Ukraine "On medicinal products").

Information about medicinal products is contained in the State register of medicinal products of Ukraine.

In view of above specified, only medicinal products are medicines that are intended to promote cessation of tobacco use.

Any other non-medicinal products do not have proven effectiveness in tobacco cessation and therefore cannot be prescribed to promote tobacco cessation.

Therefore, taking into account information of the Ministry of Health, legality of assigning nicotine-containing products to products of commodity subcategory according to the Ukrainian classification of the foreign activity products 2404 91 10 00 "Nicotine-containing products intended to promote cessation of tobacco use" must be confirmed by the presence of information about such products in the State register of medicinal products of Ukraine.