Canadian Vaping Excise Tax Section

Description: For the enlarged image of the electronic cigarette consumption tax coupon, the marked arrows point to the anti duplication line, tax coupon type, color changing ink, intaglio latent image, jurisdiction indicator, tax payment status and unique identifier.

• The tax slip type is located in the upper left corner of the tax slip, and the words "VAPING VAPOTAGE" are written in black letters in horizontal lines.

• At the bottom of these words, there is a box with a red maple leaf and a pattern to prevent plagiarism.

• The peach anti duplication line covers most of the rest of the left and center of the tax strip, except the part covered by the color changing ink and the intaglio latent image.

• The color changing ink is located in the square box at the top center of the tax strip.

• The intaglio latent image is located in the circle at the bottom center of the tax strip.

• On the right side of the color changing ink and intaglio latent image, there is a vertical peach bar across the width of the tax bar. This clause includes the jurisdiction indicator "CAN" in white letters running horizontally. It also includes the tax payment status "DUTY PAID CANADA DROIT ACQUITT ¦" displayed in vertical black letters.

• The unique identifier is located on the right side of the tax strip, with black characters arranged vertically.

? Visible features include:

• The size of the electronic cigarette consumption tax coupon is exactly 20 ×  40mm

• Tax stripe type, which indicates the product on which the tax stripe must be applied

• Jurisdictional indicators, including abbreviations of jurisdictional names, and distinctive ribbons and backgrounds of jurisdictional areas; At present, no province or region adopts a coordinated federal e-cigarette capping system, so only the Canadian tax bill is available

• Unique identifier, which is an alphanumeric identifier, starting with three uppercase letters followed by six numbers, and is specific to each electronic cigarette consumption tax coupon

• Tax paid status, clearly indicating that the electronic cigarette tax has been paid for the electronic cigarette products

? Public security functions include:

• Intaglio latent image, which is a kind of carved image with unique tactile and visual effects; On the vaping consumption tax strip, the letter C can be seen with the slight movement of the tax strip from a normal perspective

• Color changing ink. When the viewing angle is changed by tilting the vaping excise tax strip, the color will change from green to red

• Anti duplication line, which provides a unique and unique appearance for the vaping consumption tax strip, and because the quality and clarity of the line work will not be transferred to the copied file, it is difficult to copy the tax strip by copying

• UV visible ink, which emits fluorescence under black light sold in the market

The following personnel must affix the electronic cigarette consumption tax slip on the packaged electronic cigarette products used in the Canadian duty paying market:

• Electronic cigarette product license holder for packaging electronic cigarette products

• Electronic cigarette product license holder of imported packaged electronic cigarette products

• Designated personnel of electronic cigarettes for imported packaged electronic cigarette products

The following electronic cigarette products do not need to be attached with the electronic cigarette consumption tax coupon:

• Electronic cigarette products with drug identification number assigned according to food and drug regulations

• Electronic cigarette products for export

• Electronic cigarette products intended to be sold to accredited representatives

If only the packaged electronic cigarette products are imported into Canada, you can apply to be the importer of electronic cigarette products

Qualifications for becoming the designated person of electronic cigarette

1. To apply for becoming a designated person of e-cigarette to obtain the e-cigarette consumption tax slip, all the following conditions must be met:

• Not the object of debt takeover

• It has not violated any parliamentary act (except the Consumption Tax Act 2001) or any regulation of the provincial or regional legislature dealing with the taxation or control of alcohol, tobacco products or electronic cigarette products, or any regulation therein, and has not taken any action to deceive Her Majesty in the past 5 years

• Each participant must be at least 18 years old

• Sufficient financial resources to conduct business in a responsible manner

2. The following information must also be provided:

• List of places to be shipped for electronic cigarette consumption tax

• The address where the books and records are kept to indicate the electronic cigarette excise tax slip issued, used and/or destroyed

• Business plan (including business industry overview, operation plan, financial plan or source of funds, and sales and marketing plan)

• Acceptable financial guarantees

3. Financial safety requirements

-The minimum amount of financial guarantee required by the designated personnel of electronic cigarette is 5000 dollars. The maximum amount of financial guarantee will be USD 5 million.

-Financial security calculation: 1 dollar multiplied by the number of tax receipts you hold or will issue to you

How to apply for becoming the designated person of electronic cigarette

-To apply to become an electronic cigarette designated person, use Form L603 to apply.

-The following may also need to be attached:

• Form L600-B, Schedule B – Information relating to individuals, partners, directors, officers or shareholders

• Form L601, registration of electronic cigarette printing system

• Form L604, Electronic Cigarette Guarantee Deposit – Designated Person

CRA will review the information provided in the L603 form to determine whether the applicant is qualified to be the designated person for electronic cigarettes. If you need more information, you may contact the applicant. When the applicant meets the eligibility criteria, the CRA will send a confirmation letter by mail and provide a new GST program account number.

Responsibilities of designated personnel for electronic cigarette

• Registration of electronic cigarette stamp tax system (Vapor Stamping Regime.)

• Submit the monthly electronic cigarette information declaration form - designated person, including reporting the tax slip inventory

• All supporting documents shall be kept for at least 6 years to support your use of various tax receipts

• Be responsible for all electronic cigarette consumption tax receipts received, and may be punished for any missing tax receipts

• Remittance of duties on imported electronic cigarette products to the Canadian Border Service at the time of import

• If any information provided in the license application has changed or is no longer accurate, it needs to be fed back to the CRA immediately.

Valid period as the designated person of electronic cigarette

The registration of the designated person of electronic cigarette shall take effect from the date indicated in the approval letter and remain valid until the person requests to be cancelled or no longer qualified to be the designated person of electronic cigarette.

For contact information about the Regional Excise Office, visit Contact Information - Contact Information - Excise, Excise, Fuel and Air Passenger Security

???????????????

-Form L601 can be used to register the electronic cigarette stamp duty slip system

-After registration, the CRA will review the information provided in the applicant's L601 form to determine whether the applicant is eligible to use the electronic cigarette excise tax slip. If more information is needed, the CRA may contact them. After the audit, CRA will confirm the validity of its registration by email and provide instructions on how to purchase tax slip. CRA has the right to issue and limit the number of electronic cigarette excise tax strips purchased.

?????????????61564

• Stick the electronic cigarette consumption tax slip on the electronic cigarette product at the time of packaging or before importing the packaged electronic cigarette product

• Report tax strip inventory on Form B600, Electronic Cigarette Tax and Information Return (for holders of electronic cigarette product licenses) or Form B601, Electronic Cigarette Information Return - Designated Person

• Keep all supporting documents for 6 years to support the use and destruction of tax receipts

The missing electronic cigarette consumption tax slip may be punished.

? Ordering process of electronic cigarette consumption tax slip

After registering the electronic cigarette stamp duty slip system, the ordering process is as follows:

• After successful registration, an account and temporary password will be obtained. The buyer of the tax receipt can log in to the online tax receipt ordering system to order, and can choose to accept the approval notice via email.

• CRA reviews the tax slip orders received on each working day to verify the qualification of the tax slip purchaser and the details of the order. The CRA also conducts regular checks of tax regulations to determine compliance with the Act and its provisions. Orders received before noon Eastern Standard Time (EST) on each business day will be reviewed on that business day. Orders received after noon will be reviewed on the next working day. Approve the order and release it to the CRA authorized tax receipt provider for processing.

• When the CRA authorized tax invoice supplier receives an order approved by the CRA, it will process the order according to the delivery standard specified in the supply arrangement between the tax invoice supplier and the tax invoice purchaser. As part of the supply arrangement, all transport terms are arranged by the CRA authorized tax invoice supplier.

• The electronic cigarette consumption tax coupon is delivered in the form of 500 dry (non sticky) independent tax coupons. Once the tax slip is delivered to the tax slip purchaser or a third party, the tax slip purchaser will be responsible for the electronic cigarette consumption tax slip. The buyer of the tax strip can choose to sign a contract with a third party to add adhesive to the tax strip and convert it into a reel form for convenient application. Any lost or damaged tax slip in the process shall be the responsibility of the tax slip purchaser.

• After receiving the e-cigarette excise tax slip, the authorized personnel at the transportation location authorized by the purchaser of the tax slip must confirm receipt of the e-cigarette excise tax slip. It is the responsibility of the tax coupon purchaser to maintain appropriate records to determine the receipt, retention, location, use or disposal of the electronic cigarette excise tax coupon ordered.

• The CRA authorized tax supplier will invoice at a pre-determined price, plus applicable taxes and delivery fees. The delivery of the electronic cigarette excise tax slip is completed through the security process, and the delivery cost also includes the applicable insurance costs. (The delivery cost and applicable insurance shall be borne by the buyer of the tax slip)

• According to the contract between CRA and CRA authorized tax coupon provider, as of September 30, 2024, the unit price of electronic cigarette excise tax coupon is 0.0067425 dollars. From October 1, 2024, the unit price will increase to 0.0,068,774 USD

? Transition rules

In order to promote the implementation, application, management and enforcement of the consumption tax framework for electronic cigarette products, the Budget Implementation Act No. 1 of 2022, Bill C-19, includes transitional products related to the collection and payment of electronic cigarette tax and electronic cigarette stamp tax, as well as electronic cigarette products with no tax sticker.

? Collection and payment of electronic cigarette tax

According to Article 158.57, electronic cigarette products manufactured in Canada and packaged on or after October 1, 2022 and electronic cigarette products imported into Canada on or after October 1, 2022 are subject to electronic cigarette tax. Electronic cigarette tax on products manufactured in Canada is paid to CRA at the time of packaging. Electronic tobacco tax on imported products shall be paid to Canada Border Service Agency (CBSA) at the time of import.

For electronic cigarette products manufactured in Canada and packaged before October 1, 2022:

• If the stamp duty strip is affixed on the electronic cigarette products before October 1, 2022, the tariff will be levied on the electronic cigarette products and paid on October 1, 2022

• If stamp duty strips are affixed to electronic cigarette products on or after October 1, 2022, tariffs will be levied on electronic cigarette products and paid when the stamp duty strips are affixed to electronic cigarette products.

If the packaged electronic cigarette products are imported into Canada before October 1, 2022, and the tax strips have been affixed when reporting according to the Customs Act, the customs duties shall be levied and paid at the time of import and paid to CBSA.

? Requirements for tax stickers of electronic cigarette products

Electronic cigarette products manufactured in Canada and packaged on or after October 1, 2022 must be affixed with an electronic cigarette excise tax coupon.

The packaged electronic cigarette products imported on or after October 1, 2022 must be affixed with the electronic cigarette consumption tax coupon.

? Holding electronic cigarette products without consumption tax coupon

Before October 1, 2022 (inclusive), it is allowed to hold the electronic cigarette products manufactured in Canada and packaged before October 1, 2022.

Packaged electronic cigarette products that are imported into Canada before October 1, 2022 without tax labels are allowed to be held before December 31, 2022 (inclusive).

From January 1, 2023, unless expressly permitted by the Act, no person shall own packaged electronic cigarette products without stamp duty strips.