DISTANCE SALES OF TOBACCO IN DENMARK: RECENT DEVELOPMENTS AND DISCUSSIONS FOR THE NEAR FUTURE
Distance sales of tobacco is possible in Denmark, subject to the correct registrations and stamps. As in other EU countries there are some limitations in the framework for the sales of tobacco that a seller must be aware of.
Discussions on increased taxes and restrictions on the sale of tobacco is ongoing. Limitation of the use of tobacco in Denmark is a big focus point for Danish political discussion. As such the Danish authorities actively control of tobacco sales in the country.
The overall direction for tobacco sales stated by the Danish government is that smoking should be limited, and a lot of effort is put into preventing people from starting smoking.
In 2020 the Danish government decided to increase the tobacco tax, step by step, moving in to 2022.
The amount of the tobacco tax on one piece has gone from 118,25 Danish Øre in 2019 to 193,54 Danish Øre by January 1st, 20221. A similar increase is applied to other tobacco goods.
A display ban for tobacco also came into force on April 1st, 2022. The ban on the visible placement and display of tobacco products also applies to sales online and via digital solutions, such as retail websites, web shops, company websites, company pages on social media and apps that sell to or address consumers.
The latest political discussions are leaning towards raising the taxes further with approximately 20-30 DKK for a packet of cigarettes (20 pieces).
At the same time the Danish government has been looking into the possibilities of introducing a lifetime ban from purchasing cigarettes for individuals born after the year 2010. However, for the time being, this idea is not possible to put into effect because EU regulations does not allow a member country to prohibit the marketing of tobacco.
The current set-up for distance sales of tobacco products in Denmark
Denmark allows distance sales of tobacco. All retailers which want to sell tobacco products across national borders, for example via online trading, must register with the Danish Safety Authorities (Sikkerhedsstyrelsen).
The Danish Safety Authorities will regularly publish and update a list of registered retailers on its website.
From May 2019 a requirement for traceability in the EU for cigarettes and rolling tobacco from the manufacturer until the last point of sale was implemented. This means that manufacturers, importers, retailers, and transporters must be registered in a common EU system.
To be able to sell tobacco goods in Denmark the product must be part of the Danish tobacco registry. The manufacture or importer can register a new product through the EU's submission portal EU-CEG. Annual submission of sales to the Danish Safety Authorities must be made.
Excise duties and registration
Tobacco is considered an excisable good and so the seller must be registered for tobacco excise duty in Denmark. The registration is dependent on the type of product; for cigarettes and smoking tobacco, the seller must be registered as registered warehouse keeper before he is allowed to start selling but for distance sales there is no requirement for an approval of a warehouse. It is also possible to register as temporary registered consignee.
For cigars and cigarillos, the distance seller can be registered as consignee or warehouse keeper.
There is no minimum sales threshold to activate the registration requirement. The seller is allowed to register through a local fiscal representative. A security deposit must be paid prior to the registration.
The tax period for authorized warehouse keepers and registered consignees is a calendar month.
The tax on cigarettes and smoking tobacco, which is sold for consumption, is paid via the purchase of stamps. The stamps are intended to ensure that excise duty has been paid on the goods sold in Denmark.
On January 1st, 2022, new stamps on cigarettes and smoking tobacco were introduced. This means that all products with old stamps are no longer to be sold after this date.
In summary, there are some challenges to selling tobacco in Denmark, with limitations on marketing and increasing taxes to consider, however, the steps needed for becoming compliant in Denmark are well defined.