The end for home-made Swedish snus?

The tax issue is settled after the snus company Prillan Concept was demanded an extra SEK 94 million in tax from the Customs Administration. Tests on the tobacco that the company uses in do-it-yourself snus showed that it can also be smoked.

A big disappointment

Of course, that is a big disappointment, says attorney Ulf Käll, who represents the tobacco company. According to the lawyer, the type of tobacco is treated differently in different EU countries, which means that the legal situation is unclear and that the case should, therefore, have been forwarded to the European Court of Justice. But according to the Supreme Administrative Court, the matter is already being investigated by the European Court of Justice and the Customs Administration got it right.

The battle continues

However, the matter has not been finally decided, as the issue of the snus company must pay extra SEK 94 million in tax for the tobacco that has already been imported is a process that is ongoing in parallel. The company is of the opinion that the Customs Administration’s decision contravenes the EU-law principle of protection against legitimate expectations, which must be decided in administrative law.

Should the decision stand, the company will go bankrupt. This money does not exist, says the lawyer Ulf Käll.

Home-made snus is threatened

The ruling in the Supreme Administrative Court could mean the end to do-it-yourself snus, according to the lawyer.

“Products will disappear”

In the future, there is a great risk that these types of products will disappear from the Swedish market. They will not be able to produce when there is double taxation - first smoking tobacco tax when you take it into the country, then snus tax if you sell it as snus, says Ulf Käll.

June 2019: Tobacco tax goes to the highest court.

In June, the Supreme Administrative Court decided to grant a trial permit in the Prillan Concept in Borås AB’s tobacco tax case. This decision means that the Administrative Court of Appeal in Stockholm has not gained legal force. We (Kungssnus) asked the Supreme Administrative Court if any date has been set yet for the case. The answer we got was that the goal is not yet clear to be decided. The exchange of letters between the parties is still ongoing.

Judgment was misleading

Prillan’s lawyers believe that the decision was expected and show that the Customs and Tax Administration’s statements after the Court of Appeal in Stockholm’s judgment “that it is now clear what applies” were misleading. It remains to be seen whether the Supreme Administrative Court will seek a preliminary ruling in the case from the European Court of Justice.

The last instance

The Supreme Administrative Court is the highest and last instance in the general administrative courts. The Court’s decision cannot be appealed or reviewed. The European Court of Justice is not a supreme court of the Supreme Administrative Court. Thus, it is not possible to appeal against the decisions of the Supreme Administrative Court to the European Court of Justice. Nor does the European Court of Justice constitutes a supreme court of the Supreme Administrative Court.

The judicial decision 2019-12-16

Judgment in tobacco tax cases

Objectives: 4028-18, 4029-18

In a ruling today, the Supreme Administrative Court has ruled that a tobacco product is taxable for tobacco tax. The tobacco is believed to have been cut or otherwise shredded and can be smoked without further industrial preparation.

A company has imported a tobacco product that will be used to make snus. The product consists of flakes of tobacco leaves. The tobacco leaves have been threshed, treated with water and steam, sieved and then sorted by size. Shaft and leaf nerves have been cleared.

Tobacco tax must be paid for smoking tobacco in accordance with the Tobacco Tax Act. Smoke tobacco is, among other things, tobacco that has been cut or otherwise shredded, twisted or pressed into cookies and which can be smoked without further industrial preparation.

In a judgment (Eko-Tobacco, C-638/15), the European Court of Justice has ruled that the concept of “smoking tobacco” must not be interpreted restrictively. The European Court of Justice also stated that the term “cut” refers, inter alia, to the result of an intervention which means that part or part of something is removed with a sharp tool, while “shredded” means that something has been cut or split.

According to the European Court of Justice, the concepts should be interpreted broadly. The European Court of Justice considered that tobacco leaves whose leaf shaft had been partially removed are tobacco that has been cut or otherwise shredded. The tobacco leaves could be smoked after a simple preparation which consisted of the leaves being chopped or cut by hand. The product was thus, according to the European Court of Justice, covered by the term “smoking tobacco”.

In the cases that the Supreme Administrative Court has now tried, the Customs Administration has carried out smoke tests which show that the tobacco can be smoked if it is moistened and placed in some form of container. The Supreme Administrative Court considers that there is no reason to question the smoke tests, even if they were carried out with an analytical method used in the classification of goods for customs purposes. The product is therefore considered to be smokable without further industrial preparation.

Furthermore, in light of the ECJ’s statements in the Eco-Tobacco case, tobacco must be considered to have been cut or otherwise shredded within the meaning of the Tobacco Tax Act. The tobacco product that the company has imported thus constitutes smoking tobacco and is thus liable to tax on tobacco tax. The Supreme Administrative Court, therefore, dismisses the company’s appeal.

The future

This decision is for the coarse grind tobacco Prillan produces. At the moment regular grind tobacco flour is not affected by this decision. But maybe it’s just a matter of time and a change to a couple of lines in the law to make all snus tobacco affected by this law. So before this happens, it’s better to learn to grow your own tobacco. I have not grown any tobacco for a couple of years, but this season I’m planning to grow tobacco again. So keep your eyes peeled for future posts on the subject.

References

sn.se Södermanlands Nyheter 2019-12-26



snusfabriken.com Kungssnus 2019-09-15, 2019-09-15

Pictures

Judge hammer by TPHeinz @pixabay

Justice by 3602209 @pixabay

What do you think about this? Do you smoke snus-tobacco? Leave a comment and let me know.

Take it easy and snus on.

Anders

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