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Overview of Vaping Excise Stamps

From: Canada Revenue Agency

Excise Duty Notice EDN80

July 2022

The purpose of this notice is to provide information on excise stamps for vaping product licensees that intend to package vaping products in Canada or import packaged vaping products intended for the duty-paid market, as well as for vaping prescribed persons that import packaged vaping products into the duty-paid market. It also provides information on the transitional provisions that relate to the vaping stamping regime. 

Except as otherwise noted, all statutory references in this publication are to the provisions of the Excise Act, 2001. In addition, all references to the “Regulations” are to the Stamping and Marking of Tobacco, Cannabis and Vaping Products Regulations. The information in this publication does not replace the law found in the Act and its regulations.

If this information does not completely address your particular situation, you may refer to the Act or relevant regulation, or contact your CRA regional excise office for additional information. The offices are listed at Contact Information – Excise Duties, Excise Taxes, Fuel Charge and Air Travellers Security Charge.

Table of Contents

Overview

The Canada Revenue Agency (CRA) is responsible for administering and enforcing the excise duty framework for vaping products included in the Excise Act, 2001. This framework includes the imposition of excise duties that generally apply to vaping products manufactured in Canada or imported into Canada and intended for the duty-paid market. The duty applies to vaping products whether or not they contain nicotine.

General information on vaping excise stamps

Under section 158.36, the CRA may issue vaping excise stamps to a vaping product licensee or to a vaping prescribed person that is importing vaping products. No person will be issued stamps unless the person has registered for the vaping stamping regime and provided adequate financial security in a form satisfactory to CRA. The quantity of stamps to be issued to a person may be limited by the CRA.

Possession of vaping excise stamps

Subsection 158.38(2) of the Act and subsection 4(4) of the Regulations provide that only the following persons are authorized to possess vaping excise stamps that have not been affixed:

Subsection 158.38(1) prohibits any other person from possessing a vaping excise stamp that has not been affixed to a vaping product.

Counterfeit and unlawful supply of vaping excise stamps

Section 158.37 states that no person shall produce, possess, sell or otherwise supply, or offer to supply, anything that is intended to resemble or pass for a vaping excise stamp.

Section 158.39 states that no person shall dispose of, sell or otherwise supply, or offer to supply, a vaping excise stamp other than in accordance with the Act.

Purpose of the vaping excise stamp

The purpose of the vaping excise stamp is to demonstrate that vaping duty has been paid on the packaged vaping products entered into the duty-paid market.

The stamp achieves this by integrating various visible features combined with overt and covert security features. An overview of some of the visible features and overt security features is provided below. In order to protect the integrity of the vaping excise stamp, only certain overt security features and none of the covert security features are identified.  

An enlarged image of a vaping excise stamp with labelled arrows pointing to the anti-copy line work, the stamp type, the colour shift ink, the intaglio latent image, the jurisdiction indicator, the duty-paid status and the unique identifier
Image description

An enlarged image of a vaping excise stamp with labelled arrows pointing to the anti-copy line work, the stamp type, the colour shift ink, the intaglio latent image, the jurisdiction indicator, the duty-paid status and the unique identifier.

The stamp type is located in the top left corner of the stamp with the words “VAPING VAPOTAGE” written in black letters that run horizontally.

Below these words is a box containing a red maple leaf and red anti-copy line work.

Peach-coloured anti-copy line work covers much of the rest of the left side and the centre of the stamp, with the exception of the parts that are covered by colour shift ink and the intaglio latent image.

The colour shift ink is located in a square box at the top centre of the stamp.

The intaglio latent image is located within a circle at the bottom centre of the stamp.

There is a vertical, peach-coloured bar that spans the width of the stamp to the right of the colour shift ink and intaglio latent image. This bar includes the jurisdiction indicator “CAN” in white letters that run horizontally. It also includes the duty-paid status “DUTY PAID CANADA DROIT ACQUITTÉ” in black letters that run vertically.

The unique identifier is located on the right side of the stamp in black characters that run vertically.

The visible features include:

The overt security features include:

Requirement to be registered for the vaping stamping regime

Every person that wishes to purchase vaping excise stamps to be applied to packaged vaping products entering the duty-paid market is required to be registered under the vaping stamping regime.

A person must register for the vaping stamping regime if the person is one of the following:

A person does not have to register for the vaping stamping regime if the person is one or more of the following:

A person may apply to be registered for the vaping stamping regime at the same time they apply for a vaping product licence or vaping prescribed person registration under the Act by completing Form L601, Registration for the Vaping Stamping Regime.

For more information on obtaining a vaping product licence, refer to Excise Duty Notice EDN79, Obtaining and Renewing a Vaping Product Licence.

For more information on applying to become a vaping prescribed person, refer to Excise Duty Notice EDN81, Becoming a Vaping Prescribed Person.

Requirements under the vaping stamping regime

Stamping of vaping products

All vaping products entering the duty-paid market must bear a vaping excise stamp.

Under section 158.46, vaping products manufactured in Canada must be stamped at the time of packaging by the vaping product licensee prior to entering the duty-paid market. If vaping products manufactured in Canada are not stamped by the vaping product licensee at the time of packaging, the licensee must immediately enter the vaping product into the licensee’s excise warehouse, unless it is a vaping product drug that has been assigned a drug identification number.

Under section 158.47, vaping products that are being imported into Canada must be packaged and have a vaping excise stamp affixed to the products before they can be released under the Customs Act to enter the duty-paid market. If an imported vaping product intended for the duty-paid market is packaged and not stamped when it is being imported, it shall be placed in a sufferance warehouse for the purpose of being stamped by the importer or owner of the imported vaping product.

Section 4.2 of the Regulations requires that the stamp be affixed:

  1. in a conspicuous place on the package
  2. in a manner that seals the package
  3. in a manner that the stamp remains affixed to the package after the package is opened
  4. in a manner that does not interfere with the stamp’s security features
  5. in a manner that does not obstruct any information required by or under an Act of Parliament to appear on that package

Vaping products that do not require a vaping excise stamp

The following vaping products are not required to bear an excise stamp:

Financial security requirements

Under subsection 158.36(3), vaping product licensees and vaping prescribed persons must provide and maintain adequate financial security in a form satisfactory to the CRA prior to being issued vaping excise stamps. The amount of financial security required, as set out in section 4.11 of the Regulations, is equal to the greater of:

The maximum amount of financial security required is $5 million.

Vaping excise stamps considered to be in the possession of a person include stamps:

Vaping product licensees may be required to provide additional financial security. For more information, refer to Excise Duty Notice EDN79.

Reporting requirements

Vaping product licensees registered for the vaping stamping regime must report on their vaping excise stamp inventories on a calendar month basis by completing Form B600, Vaping Duty and Information Return.

Vaping prescribed persons registered for the vaping stamping regime must report on their vaping excise stamp inventories on a calendar month basis by completing Form B601, Vaping Information Return – Prescribed Person.

Subsection 206(2.2) requires every person that has been issued an excise stamp to keep all records that are necessary to determine the receipt, retention, location, use or disposition of the stamp. This requirement applies to vaping product licensees and vaping prescribed persons with respect to vaping excise stamps. Subsection 206(7) requires every person that is required to keep records to keep them for six years after the end of the year to which they relate.

Cancellation and destruction of vaping excise stamps

Section 158.4 allows the CRA to cancel a vaping excise stamp that has been issued and direct that it be returned or destroyed in a manner specified by the CRA. Any vaping excise stamps that become unusable must be retained by the vaping product licensee or the vaping prescribed person until they are verified by the CRA.

Unaccounted for vaping excise stamps

Under subsection 238.1(1), a person that is issued vaping excise stamps is liable to a penalty if the person cannot account for the stamps as being in their possession. The penalty applies unless the person can demonstrate that the stamps were affixed to vaping products in accordance with the Act and that vaping duty was paid on the vaping products or, in the case of stamps that were cancelled, the person can demonstrate that the stamps were returned or destroyed as directed by the CRA.

Under paragraph 238.1(2)(c), the amount of the penalty imposed for each vaping excise stamp that cannot be accounted for is $5.

Vaping excise stamp ordering process

Upon receiving approval to be registered under the vaping stamping regime, a vaping product licensee or vaping prescribed person (in this section, referred to as stamp purchaser) is provided with a user name and temporary password to access the online stamp ordering system.

The stamp purchaser can then log on to the online stamp ordering system and place an order for vaping excise stamps by entering the assigned user name and password. For security purposes, it is recommended that the stamp purchaser change this password when they first log on to the system.

Once an order is placed, the stamp purchaser may track the status of their orders online.

The CRA reviews stamp orders received each business day to verify the eligibility of the stamp purchaser and the details of the order. The CRA also periodically performs reconciliations of stamps to determine the level of compliance with the Act and its regulations.

Orders received by noon Eastern Standard Time (EST) each business day are reviewed that business day. Orders received after noon are reviewed on the following business day.

Once an order has been reviewed, the CRA will either:

Stamp purchasers that order vaping excise stamps may elect to receive a notice of approval by email.

When the CRA-authorized stamp provider receives an approved order from the CRA, it processes the order according to the delivery standards set out in the supply arrangement between the stamp provider and the stamp purchaser. All shipping terms are arranged with the CRA-authorized stamp provider as part of the supply arrangement.

Vaping excise stamps are delivered as dry (non-adhesive) individual stamps wrapped in bundles of 500. Once the stamps are delivered to the stamp purchaser or a third party, the stamp purchaser becomes responsible for the vaping excise stamps. The stamp purchaser may choose to contract a third party to add adhesive to the stamps and convert them to a roll format to facilitate application. Any stamps lost or damaged in this process are the responsibility of the stamp purchaser.

Upon receipt of the vaping excise stamps, an authorized person at the stamp purchaser’s authorized shipping site must acknowledge receipt of the vaping excise stamps. It is the responsibility of the stamp purchaser to maintain appropriate records to determine the receipt, retention, location, use or disposition of the vaping excise stamps ordered.

The CRA-authorized stamp provider issues an invoice for the vaping excise stamps delivered at pre-established prices plus applicable taxes and delivery charges. The delivery of the vaping excise stamps is done through a secure process, and delivery charges also include the cost of applicable insurance.

In accordance with the contract between the CRA and the CRA-authorized stamp provider, the unit price of a vaping excise stamp is $0.0067425 until September 30, 2024. Effective October 1, 2024, the unit price will increase to $0.0068774.

Transitional rules

To facilitate the implementation, application, administration and enforcement of the excise duty framework for vaping products, Bill C-19, Budget Implementation Act, 2022, No. 1 includes transitional provisions related to the imposition and payment of vaping duty, the stamping of vaping products, as well as to the possession of unstamped vaping products.

Imposition and payment of vaping duty

Vaping duty is imposed under section 158.57 on vaping products that are manufactured in Canada and packaged on or after October 1, 2022, and on vaping products that are imported into Canada on or after October 1, 2022. The vaping duty on products manufactured in Canada is payable to the CRA at the time of packaging. The vaping duty on imported products is payable to the Canada Border Services Agency (CBSA) at the time of importation. 

For a vaping product that is manufactured in Canada and packaged before October 1, 2022:

If a packaged vaping product is imported into Canada before October 1, 2022, and is already stamped at the time it is reported under the Customs Act, the duty is imposed and payable at the time of importation and is paid to the CBSA.

Stamping requirements for vaping products

A vaping excise stamp is required to be affixed to vaping products that are manufactured in Canada and packaged on or after October 1, 2022.

A vaping excise stamp is required to already be affixed to packaged vaping products that are imported on or after October 1, 2022.

Possession of unstamped vaping products

Possession of unstamped vaping products that were manufactured in Canada and packaged before October 1, 2022, is permitted up to and including December 31, 2022.

Possession of unstamped packaged vaping products that were imported into Canada before October 1, 2022, is permitted up to and including December 31, 2022.

As of January 1, 2023, no person is permitted to possess unstamped packaged vaping products unless explicitly permitted under the Act.

For additional information on the vaping excise stamp, go to Excise duty on vaping products or contact the Excise Stamp Order Desk at:

Excise Stamp Order Desk
Program Operations Division
Excise and Specialty Tax Directorate
Canada Revenue Agency
Place de Ville Tower A 11th fl
320 Queen St
Ottawa ON  K1A 0L5

Telephone: 1‑866‑330‑3304
Fax: 418‑556‑1840
Email: excise.stamp@cra-arc.gc.ca

Further information

For all technical publications related to the Excise Act, 2001 and its regulations, go to Excise duties technical information under the Excise Act, 2001.

To request an excise duty licence for vaping products, contact your regional excise office. These offices are listed at Contact Information – Excise Duties, Excise Taxes, Fuel Charge and Air Travellers Security Charge.

For all enquiries on the application of excise duty to vaping products, call 1‑866‑330‑3304 or send an email to LPVAPINGG@cra-arc.gc.ca.

To request a ruling or interpretation related to the application of excise duty to vaping products, write to:

Excise Duty Division
Excise and Specialty Tax Directorate
Canada Revenue Agency
Place de Ville Tower A 11th fl
320 Queen St
Ottawa ON  K1A 0L5

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