Tobacco: what the European compromise discussed by Luxembourg provides for

The compromise discussed by 26 states, including Luxembourg, is not yet law. What it could change for excise duties and the transport of cigarettes.

The European compromise discussed on 9 November on tobacco excise duties is not a tax rise already written into law. According to RTL, 26 member states, including Luxembourg, supported a revised proposal, while Malta opposed it. Negotiations must therefore continue. For the Grand Duchy, the issue combines two distinct concerns: the minimum level of taxation that the EU would like to bring closer across countries, and the quantity of cigarettes a person could carry for their personal consumption.

The distinction matters both to consumers and to public finances. An excise duty is an indirect tax applied to certain products; it forms part of their price, but its EU minimum is not the final retail price. And a concession reported during negotiations does not, by itself, change the rules applicable to travellers.

A European minimum, not a common price

Member states levy excise duties and retain the corresponding revenue. The EU sets minimum levels for certain categories; each country can choose to tax above them. The Council of the EU explains that these taxes are included in the price and that harmonisation is intended, among other things, to reduce disparities that could encourage cross-border shopping or illicit trade.

The revision under discussion also concerns the range of products covered. The European Commission’s proposal, presented in July 2025, seeks to include e-cigarettes, heated tobacco and nicotine pouches in the revised framework. This does not make these products equivalent in composition or use: the change concerns their tax treatment under the proposal.

For excise duties, the procedure requires the agreement of every state. The Commission proposes, the European Parliament is consulted, and the Council then adopts the legislation unanimously in this area. The support of 26 governments reported by RTL is therefore not enough to bring the measure into force, since Malta opposed it. The support described by RTL reflects the state of the negotiations, not an adopted directive.

What the 25% figure means

RTL reports that the compromise provides for a gradual 25% increase in tobacco excise duties by 2036. This is a trajectory outlined in a proposal, not an immediate 25% rise in the price of a packet. The price paid by the buyer depends on several factors, including excise duty, VAT and commercial decisions. Without a detailed national scale of rates or a reference price, this figure does not make it possible to calculate the future cost at the till in Luxembourg.

The compromise is presented as a revised version of the initial draft. Charel Lemmer, Landewyck’s director for the German-speaking regions, described it as “tolerable” compared with the initial scenario.

The aims of tax convergence and public health are linked in the debate, but they are not the same. The Council presents reducing disparities as a way to limit incentives for cross-border shopping and illicit trade. The Commission also links the revision to public health objectives. Landewyck, which sells products affected by the measure, highlights the risk of the black market expanding. Its warning represents the position of an economic stakeholder directly affected by the reform, not an independent measure of an effect already produced by this proposal.

The concession on cartons remains under negotiation

RTL also reports that, under the compromise, Luxembourg agreed to reduce from four cartons to one the quantity of tobacco intended for personal consumption. Finance Minister Gilles Roth presented this gesture as a sign of goodwill towards France. Here too, this is an element of the reported negotiations, not a new limit already applicable to travel.

The EU rules currently presented to travellers are based on the destination of the products: excise duties are in principle payable in the country where they are consumed, with an exception for private purchases intended for personal use and not for resale. For cigarettes, Your Europe gives 800 units as an indicative value. This benchmark is neither an absolute authorisation to carry that quantity in all circumstances, nor automatic proof that a purchase is for personal use.

Customs authorities can examine several factors, including quantity, packaging, transport and the person’s circumstances. Each country can specify its indicative values, which cannot be lower than the EU benchmarks mentioned by Your Europe. If in doubt about a particular destination, the information provided by the authorities of the country concerned is what matters. A carton generally contains 200 cigarettes, but the proposed change from four cartons to one in the negotiations should not be confused with the current indicative benchmark of 800 cigarettes.

What readers should take away

For residents and cross-border commuters, there are therefore two practical points to keep in mind. First, the proposed tax trajectory does not yet make it possible to anticipate the future price of a packet. Second, the transport limit announced in the compromise has not replaced the rules currently in force. Before travelling, it is best to distinguish the political proposal from the customs instructions in force in the destination country.

The next step will determine whether the states can agree on a unanimous text, and then which minimum levels and arrangements will actually be adopted. Until that process is complete, the issue remains a balancing act between tax convergence, public health, national revenue and the monitoring of trade, not a new rule to apply from today.