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In March 2026, Germany was already facing a growing challenge in its legal and illegal vape market. A report from Nicotine Insider cited industry and customs groups estimating that around 40% of e-cigarettes circulating in Germany were illegal, while German authorities warned that only part of the illegal market was visible through customs seizures.
Six months later, the German vape market is facing another important development: another increase in e-liquid taxation is being discussed for 2027. Germany’s Federal Ministry of Finance has proposed raising the tax on substitutes for tobacco products from €0.32 to €0.33 per milliliter in 2027. However, the governing CDU/CSU and SPD parliamentary groups are now pushing for a larger increase to €0.35 per milliliter.
The difference may appear small when measured by the milliliter, but the issue is becoming more significant because the legal market is already dealing with higher taxation, changing regulations and concerns about the growth of illicit trade.
Key Takeaways
- ▪ €0.32/ml is the current German tax rate for e-liquid and other taxable substitutes for tobacco products in 2026.
- ▪ €0.33/ml is the 2027 rate contained in the Federal Ministry of Finance’s current tax proposal.
- ▪ €0.35/ml is the higher rate currently being pushed by the CDU/CSU and SPD parliamentary groups.
- ▪ €0.36/ml is the rate currently listed for 2030 in the federal government’s four-stage proposal.
- ▪ €3.20 is the current excise tax on 10 ml of taxable liquid at the 2026 rate of €0.32/ml.
- ▪ €3.50 would be the excise tax on 10 ml if the proposed €0.35/ml rate were adopted.
- Germany’s vape market was already under scrutiny in March, when industry and customs groups warned that the illegal market was growing.
- The proposed 2027 increase has renewed concerns from German industry representatives about the potential effect on legal sales and illicit trade.
1. Germany’s Vape Market Was Already Under Pressure in March
The latest tax debate did not emerge in isolation. In March 2026, Nicotine Insider reported on Germany’s growing illegal vape market, citing a joint briefing involving the German Association of the Tobacco Industry and Novel Products (BVTE) and the German Customs and Finance Union (BDZ).
The report said industry-backed research estimated that approximately 40% of vapes circulating in Germany were illegal. The estimate included products that avoided excise taxes, exceeded permitted nicotine levels or failed to meet packaging and labeling requirements.
At the same time, the report stressed that Germany does not have a comprehensive official statistic covering the entire illegal nicotine market. Customs data primarily record seizures rather than the total amount of products entering or circulating outside the legal market.
That distinction is important when discussing the current tax debate. The March figure is an industry-backed estimate rather than an official measurement of the entire German market. Nevertheless, it established the background against which the latest tax proposal is now being discussed.
German customs officials also pointed to the increasing complexity of online sales and parcel deliveries. According to the March report, authorities said illegal nicotine products were increasingly moving through online purchasing and parcel networks, making enforcement more difficult.
| Key Market Indicator | Figure | Source |
|---|---|---|
| Estimated share of illegal vapes | Around 40% | Nicotine Insider |
| Current e-liquid tax in 2026 | €0.32/ml | German Federal Ministry of Finance |
| Federal proposal for 2027 | €0.33/ml | German Federal Ministry of Finance |
| Higher rate sought by coalition groups | €0.35/ml | DIE ZEIT / dpa |
2. How Much Could Germany’s E-Liquid Tax Increase?
Germany introduced its current e-liquid taxation system in stages, with the tax on substitutes for tobacco products reaching €0.32 per milliliter on January 1, 2026. The Federal Ministry of Finance now proposes continuing the increases from 2027 through 2030.
Under the government’s current proposal, the tax would rise by one cent per milliliter each year. That would take the rate from €0.32/ml in 2026 to €0.33/ml in 2027, €0.34/ml in 2028, €0.35/ml in 2029 and €0.36/ml from 2030.
However, the latest political discussion has introduced a different possibility for 2027. According to a September 6 report from DIE ZEIT, the CDU/CSU and SPD parliamentary groups are seeking to raise the 2027 rate to €0.35/ml instead of the €0.33/ml proposed by the Finance Ministry.
For consumers and retailers, the difference becomes easier to understand when converted into the tax applied to a standard 10 ml bottle.
| Year | Tax per ml | Tax on 10 ml |
|---|---|---|
| 2026 | €0.32 | €3.20 |
| 2027 — Federal proposal | €0.33 | €3.30 |
| 2027 — Higher rate under discussion | €0.35 | €3.50 |
| 2028 — Current federal proposal | €0.34 | €3.40 |
| 2029 — Current federal proposal | €0.35 | €3.50 |
| 2030 — Current federal proposal | €0.36 | €3.60 |
The important point is that €0.35/ml for 2027 is not yet the final legal rate. The Federal Ministry of Finance’s published proposal still lists €0.33/ml for 2027. The higher €0.35/ml figure reflects the position currently being pursued by the governing parliamentary groups.
The tax is also subject to VAT. As a result, the final retail-price effect is not limited to the excise-tax difference itself. According to the latest industry reporting, a typical 10 ml bottle priced at around €12 could become approximately €0.36 more expensive if the €0.35/ml rate were adopted, after accounting for the tax and associated VAT effect.
3. Why the Tax Increase Is Becoming a Bigger Market Issue
A one-cent increase per milliliter may sound relatively modest when viewed on its own. The debate becomes more significant when placed alongside the tax increase that already took effect in 2026.
The German e-liquid tax increased from €0.26/ml in 2025 to €0.32/ml in 2026. The current proposal would continue increasing the rate from there, while the alternative being discussed for 2027 would move it directly to €0.35/ml.
Legal Retailers Face a Changing Price Environment
For legal retailers, taxation is only one part of the final retail price. Products must also comply with Germany’s regulatory requirements, while businesses operating through official distribution channels must account for standard commercial costs, VAT and other expenses.
That creates a clear distinction between products sold through regulated channels and products that avoid the applicable tax and compliance requirements.
The March report on Germany’s illegal vape market therefore provides an important backdrop to the current discussion. Industry and customs representatives were already warning about the difficulty of monitoring products entering the market through unofficial channels before another potential tax increase became the focus of attention.
Industry Groups Raise Black-Market Concerns
The Bündnis für Tabakfreien Genuss (BfTG) has argued that another significant tax increase could put additional pressure on legal sales. BfTG chairman Dustin Dahlmann said that the illegal-market share was estimated to have increased from around 40% to around 50% following the 2026 tax increase.
This figure should be understood as an industry estimate rather than an official government measurement. Germany’s customs authorities have also emphasized that seizure data cannot provide a complete picture of the total illegal market.
Nevertheless, the overlap between the two stories is difficult to ignore: in March, German industry and customs representatives were already discussing the growth of illegal vape products; by September, another tax increase was becoming a major point of debate.
4. What Happens Next for Germany’s Vape Market?
For now, the most important distinction is between what is already law, what has been formally proposed, and what is currently being discussed politically.
The €0.32/ml rate is the current tax level for 2026. The Federal Ministry of Finance’s proposal sets €0.33/ml for 2027 and then increases the rate gradually to €0.36/ml by 2030. Meanwhile, the governing CDU/CSU and SPD parliamentary groups are seeking a higher €0.35/ml rate for 2027.
That means the next stage of Germany’s vape-tax debate will determine whether the country follows the Finance Ministry’s gradual one-cent-per-year path or adopts the more aggressive increase currently being discussed by the coalition parliamentary groups.
For manufacturers, distributors and retailers operating in Germany, the outcome could affect pricing decisions, product planning and the competitive gap between regulated and unofficial channels. It also adds another layer to a market that has already been dealing with stricter enforcement and concerns over illegal product distribution.
The March warning about Germany’s growing illegal vape market therefore looks increasingly relevant to the current tax debate. The central question is no longer simply how much tax Germany will collect from each milliliter of liquid, but how future tax policy will interact with legal retail prices, market demand and the government’s ability to keep products within regulated channels.
Until the legislation is finalized, however, the €0.35/ml figure should be treated as a political proposal under discussion rather than a confirmed 2027 tax rate.
