Vapour Products Tax

General Taxation

Effective 12:01 a.m. January 1, 2021, a tax rate of 20% will be imposed, at the time of a retail sale, on the purchase of vapour products in the province.

Information Circular (RAA-VPT-2022-01-14) (289 KB)

Notices

Vapour Products Tax Forms

Frequently Asked Questions

  1. What is the effective date for the tax on vapour products?
  2. What is the tax rate imposed on vapour products?
  3. Does the vapour products tax apply before or after the HST?
  4. What vapour products are subject to the tax on vapour products?
  5. Do I have to be licenced to sell vapour products in the province?
  6. How do I register and obtain a licence to retail or wholesale vapour products in the province?
  7. Who is required to remit the tax on vapour products?
  8. Are there any requirements upon wholesalers prior to selling vapour products tax exempt to retailers and other wholesalers?
  9. Are retailers required to show the amount of tax charged on the vapour products on the customer’s receipt?
  10. Are there any requirements with regards to the sales invoices issued by wholesalers?
  11. Are sample orders or display products purchased by wholesalers subject to the tax on vapour products?
  12. Will the tax on vapour products apply to First Nations? What evidence will Government consider sufficient supporting documentation for tax not to be changed?

1. What is the effective date for the tax on vapour products?

Effective 12:01 AM on January 1, 2021, a tax at a rate of 20% of the purchase price will be applied to the sale of vapour products.

2. What is the tax rate imposed on vapour products?

A tax rate of 20% will be charged, at the time of retail sale, on the purchase price of vapour products under the Revenue Administration Act.

The purchase price includes the value in Canadian dollars of the consideration (money, goods, services, or other consideration) for which a vapour product is acquired at a retail sale and includes the custom duties and excise taxes.

3. Does the vapour products tax apply before or after the HST?

The vapour product tax will be applied prior to HST and the HST will be applied on the retail price plus the vapour products tax.

4. What vapour products are subject to the tax on vapour products?

Vapour products subject to the tax on vapour products include any vaping device, vaping substance, or vaping package, defined as follows:

  1. Vapour device – A device containing an electronic or battery powered heating element capable of vaporizing a vaping substance for inhalation or release into the air, including a component or part that can be used to build the product or device.
  2. Vapour substance – A solid, liquid, or gas that is designed for use in a vaping device and on being heated produces a vapour, which may or may not contain nicotine and does not contain cannabis. Tobacco which is subject to tobacco tax imposed under section 92(1) of the Revenue Administration Act is excluded from the definition of vaping substance.
  3. Vapour package – A vaping device and vaping substance sold together for a single price.

Vaping devices only capable of vapourizing tobacco or cannabis are not taxable, while vaping devices capable of vapourizing tobacco or cannabis and another vaping substance are taxable at the rate of 20% of the purchase price.

5. Do I have to be licenced to sell vapour products in the province?

Yes. Retailers, regardless of whether they have a permanent establishment in the province must have a licence, which authorizes the sale or keeping of vapour products for sale at a retail sale in the province. A retailer shall post the Vapour Products Retailer Licence in a conspicuous place at the retailer’s premises.

Wholesalers, regardless of whether they have a permanent establishment in the province must have a licence, which authorizes the sale or keeping of vapour products in the province for sale to retailers and other wholesalers.

A wholesaler or retailer who carries on business in more than one location must apply for a licence in respect of each location unless a consolidated licence has been approved by the minister.

There is no fee required to obtain a wholesaler or retailer licence.

6. How do I register and obtain a licence to retail or wholesale vapour products in the province?

All wholesalers and retailers must complete a Vapour Products Licence Application Form and return it to the Department of Finance for processing. This form has been emailed to all licensed tobacco wholesalers and mailed to all registered tobacco retailers. It is also available on the Department’s website at the below link: https://www.gov.nl.ca/fin/files/Application-of-Vapour-Products-Licence-June-2022.pdf.

Completed licence applications can be returned to the Department for processing by mail, fax, or email to taxadmin@gov.nl.ca.

Following the processing of your licence application, you will be issued a licence and a tax remitter number.

7. Who is required to remit the tax on vapour products?

Licensed retailers must collect the tax at the time of retail sale to consumers. Retailers must file a return and remit the tax on a monthly basis, on or before the 20th day of the calendar month immediately following the month in which the tax was collected. A separate return is required for each location of the business unless a consolidated return has been approved by the minister.

Following licensing, licenced retailers will receive a personalized tax return for the purpose of reporting and remitting the vapour products tax collected. Filing instructions will be included on the return and there will be an option to file returns and make account payments online through the Newfoundland and Labrador Electronic Tax Service. The return, along with the payment of tax due, must be received by the Department of Finance within 20 days following the reporting period. The first return for the month of January 2021 will be due February 22, 2021, along with the associated tax payment.

Licensed wholesalers are not required to file a return or remit the tax upon the sale of vapour products as they will sell on a tax exempt basis to other licensed wholesalers and retailers.

8. Are there any requirements upon wholesalers prior to selling vapour products tax exempt to retailers and other wholesalers?

A wholesaler cannot sell to another wholesaler or retailer in the province unless the wholesaler or retailer has been issued a Vapour Products Wholesaler or Retailer Licence, respectively. Licensing must be verified by the wholesaler prior to the sale of vapour products to other wholesalers or retailers.

9. Are retailers required to show the amount of tax charged on the vapour products on the customer’s receipt?

A retailer shall at the time of making a sale of a vapour product issue a receipt that clearly states the amount of vapour products tax collected by describing the amount as Vapour Products Tax or VPT.

10. Are there any requirements with regards to the sales invoices issued by wholesalers?

Yes, a wholesaler must at the time of making a sale of a vapour product issue an invoice containing:

  • the date of sale;
  • the name, address, and wholesaler’s licence number of the wholesaler making the sale;
  • the name, address, and licence number of the purchaser; and
  • the quantity of vapour products sold.

11. Are sample orders or display products purchased by wholesalers subject to the tax on vapour products?

Yes, any vapour products that a wholesaler purchases for its own use are taxable to the wholesaler. The wholesalers is required to self-assess and remit the correct vapour products tax on such products.

12. Will the tax on vapour products apply to First Nations? What evidence will Government consider sufficient supporting documentation for tax not to be changed?

Vapour products purchased by Status Indians, on a reserve, are not taxable. In order to sell tax exempt, retailers must obtain the purchaser’s Indian Status Identification Number issued by AANDC at the time of sale. Retailers must maintain records to support these exempt sales and must provide these to the Department for inspection, examination and audit upon request.

Legislation