The new year has ushered in a significant shift for smokers and vapers in Austria, as the government enforces stricter laws and higher levies on cigarettes, e-cigarettes, nicotine pouches, and hemp products. Passed by the National Council in mid-December as part of the Tax Amendment Act 2025, these measures aim to curb “uncontrolled growth” in the market, enhance youth protection, and generate additional revenue.
A central pillar of the new legislation is the massive expansion of the state tobacco monopoly. Nicotine pouches and smokable hemp flowers are now officially included in this monopoly, meaning they can generally only be sold in licensed “Trafiken” (tobacconists), subjecting them to the same rigorous regulations as traditional tobacco. This move effectively ends the previously uncontrolled distribution of these items, a change long demanded by schools and local communities.
E-Cigarettes and E-Liquids: Licensing and Taxes
E-cigarettes face a tightened regulatory environment. E-liquids are now part of the monopoly system and can only be sold in licensed specialty shops or tobacconists. Existing vape shops that have been in operation for at least three months will receive a free 20-year license, provided they meet specific conditions. New shops will require a paid license subject to a needs assessment. Crucially, the online sale of e-cigarettes and pouches remains strictly prohibited.
Starting April 2026, e-liquids and nicotine pouches will be subject to tobacco tax, calculated by volume or mass. This tax applies even to nicotine-free variants, as the government argues they also carry health risks and are difficult to distinguish from nicotine products. Further tax increases are scheduled for February 2027 and 2028.
Rising Costs and Revenue
Traditional tobacco products are not exempt; taxes on cigarettes and heated tobacco will rise incrementally from February 2026 through 2028. The Finance Ministry anticipates these changes will generate around €100 million in additional revenue this year compared to 2025. Finance Minister Markus Marterbauer stated, “With the current legal changes, we are reacting to market developments and strengthening youth and health protection,” emphasizing that these are not “new” taxes but rather modernizations of existing ones.
Exceptions and Political Reaction
There are transitional exceptions. Hemp shops existing before January 10, 2025, can continue selling smokable CBD hemp with low THC (<0.3%) until the end of 2028, provided they apply for a license. A similar transition applies to small retailers of pouches.
While the legislation received broad parliamentary support, with the ÖVP praising it as a “model law,” the FPÖ voted against the package despite finding the monopoly changes “predominantly positive.” FPÖ MP Peter Wurm criticized the new taxation on e-liquids and pouches, warning that making products “infinitely expensive” could fuel smuggling and the black market.
Read more: Global Vape Laws: A Deep Dive into U.S. and International Regulations
