EU tobacco tax reform fails as Malta blocks 26-country compromise

Malta stood alone against the other 26 EU finance ministers on 9 November 2026, blocking a unanimous general approach on revised tobacco excise rules that would have set EU minimum taxes on vape liquids, heated tobacco and nicotine pouches.

The Council’s Economic and Financial Affairs configuration met in Brussels. Because excise harmonisation under Article 113 of the Treaty on the Functioning of the EU requires unanimity, the 26-1 split produced no Council position. Current national tax rules continue to apply.

Malta objects to the level of the minimum rate and the indexing mechanism

Maltese finance minister Clyde Caruana said Malta backed the reform’s overall aims but that earlier concerns remained unresolved, according to MaltaToday. Three points drove the objection: a proposed minimum excise above Malta’s current domestic level, the mechanism for periodic EU rate adjustments, and an arrangement linking minimum burdens to member states’ purchasing power and price levels.

Caruana argued that even after the latest text changed the nicotine pouch rate, the overall minimum could hit Malta’s economy disproportionately, and that the adjustment mechanism left too little room for national tax policy.

Irish deputy prime minister and finance minister Simon Harris, who chaired the meeting, said the 26-country support represented progress and that Ireland would keep talking to Malta with a December deal in view. He said the presidency does not intend to reopen the whole negotiation.

Finland and Estonia dropped reservations before the vote

Two other holdouts moved during the meeting. Finland had wanted a higher minimum rate for nicotine pouches than the presidency proposed.

Estonia opposed a mechanism that would adjust EU minimum rates automatically without a fresh unanimous decision. It accepted a further concession: suspension of automatic adjustment of EU minimum rates until the directive’s next revision, a date not yet fixed, according to Eunews and EUobserver reports.

The presidency also floated splitting the nicotine pouch question in two: first fixing that pouches fall inside the common excise framework, then deciding the minimum rate later. That idea did not win Malta over.

Ten member states would get until 2036 to reach the cigarette minimum

The presidency’s compromise would let a group of ten member states delay full compliance with the new cigarette and rolling tobacco minimums until 1 January 2036, according to La Repubblica and Cyprus Mail. The countries named are Cyprus, Greece, Italy, Spain, Bulgaria, Croatia, Luxembourg, Portugal, Romania and Slovenia.

The test is whether reaching the proposed minimum would require average annual excise increases above 2.35% measured against 2025 tax levels.

Italy had reservations about the package. Its finance minister, Giancarlo Giorgetti, judged the latest text a workable balance between differing national positions, La Repubblica reported.

Politis, citing La Repubblica, reports that the cigarette minimum would rise in stages from €90 per 1,000 cigarettes to €140 from July 2028, €170 in 2030 and €200 in 2032, with a requirement from 2032 that excise equal at least 60% of the weighted average retail price, subject to exemptions. Those figures describe the proposal, not adopted law.

For vape liquids, including nicotine-free liquids within the directive’s definition, the proposed starting minimum is 20% of retail price or €0.20 per millilitre, Politis reported. The same report puts the starting nicotine pouch minimum at 10% of retail price or €30 per kilogram, rising over time.

A Council note issued on 5 November as ST 15387/26 set out a phased pouch schedule: from 1 January 2028, 10% of retail price or €30 per kilogram; from 1 January 2030, 25% or €40 per kilogram; from 1 January 2032, 50% or €50 per kilogram.

The Politis account also says the indicative threshold for cigarettes carried between member states for personal use would fall from 800 to 200, used as one factor when authorities judge whether a consignment is personal or commercial.

MEPs rejected the rate-setting proposal, but the Council decides

The European Parliament gave its opinion on 17 June 2026 on the two linked files. It rejected the directive on excise structure and minimum rates and proposed amendments to the directive on general excise arrangements.

Under the special legislative procedure for tax, that opinion does not end the process. The Council still has to decide the final text unanimously.

Liquid, pouch and heated tobacco makers still file against national rules

No common minimum applies, so manufacturers selling into the EU still face 27 separate national regimes for vape liquids, heated tobacco and pouches. The 2036 transition would also remove the incentive for suppliers in those ten countries to reprice cigarette-adjacent lines early, because the step-up is deferred.

VapeBrief’s analysis: the separation of pouch inclusion from the rate, if adopted, would give producers legal clarity on scope while leaving the tax level open, which complicates pricing and registration work rather than resolving it.

Finance ministers meet again on 11 December

The next regular ECOFIN meeting is scheduled for 11 December 2026, and Ireland intends to return to the tobacco tax file then. Whether a deal lands depends on the talks with Malta in the intervening weeks.

Until ministers reach unanimity, member states keep applying their own excise rules to vape liquids, heated tobacco and nicotine pouches, and the EU-wide minimum framework stays in negotiation.

Questions readers ask

Do EU minimum excise duties on vape liquids apply yet?

No. Ministers reached no general approach on 9 November 2026, so the proposed EU minimums for vape liquids, heated tobacco and nicotine pouches have not entered into force and national tax rules continue to apply.

When could the tobacco tax reform be agreed?

The next regular ECOFIN meeting is scheduled for 11 December 2026, and the Irish presidency intends to return to the file then after further talks with Malta. A deal at that meeting is not fixed.