Taxation of CBD products questionable

In Switzerland, the trade in low-THC CBD products is flourishing, although their taxation, like that of tobacco, is controversially debated.

2018

The consumption and trade of cannabis products with a THC content of under 1% is permitted in Switzerland, as they are not subject to the narcotics law. The federal government currently taxes such CBD products like tobacco. However, whether this is permissible remains questionable.

Young market with new challenges

‍For some time now, the trade in so-called CBD products has been booming in Switzerland. This involves cannabis which, however, has a THC content of under 1%. The focus here is on the permitted active ingredient cannabidiol (CBD), which, however, does not produce an intoxicating effect. For more information about CBD, you can refer to an interview with a young entrepreneur in this industry, which is posted on our partner blog at STARTUPS.CH.

‍Taxation of CBD as tobacco products

‍A new market always brings new regulations and challenges with it. One of these is the taxation of these products. In 2017, the federation was able to collect 15 million Francs in taxes, which were based on a turnover of 60 million Francs. CBD products are currently equated with tobacco products, which are subject to a 25% tax rate. As was also discussed recently in the program "10 vor 10", the current practice of CBD taxation is not uncontroversial. Katja Cupa, a lawyer and doctoral candidate at the University of Zurich, considers this tax levy as unjustified, because a precise legal basis in the law is necessary. In the present case, this would be the Tobacco Tax Law, which must name the products, but this is not the case. The Federal Customs Administration, on the other hand, sees the justification in that tobacco substitute products are also subject to the tobacco tax. The same view was also held on e-cigarettes, which the Federal Council did not share. It remains to be seen whether CBD products will continue to be taxed like tobacco, or whether the legal basis for this is sufficient. There are already two proceedings pending at the Federal Administrative Court. Until a concrete legal basis exists, the levy of taxes on CBD products remains questionable. Source: 10 vor 10, SRF

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