China is preparing another change to the tax framework surrounding its vaping industry. Under Announcement No. 29 of 2026, issued by the Ministry of Finance and the State Taxation Administration on October 12, designated vaping devices, nicotine materials, and certain non-combustible inhalation products will lose their value-added tax (VAT) export rebates from April 1, 2027.
The announcement expands a policy shift that began earlier in 2026, when China removed VAT export rebates for specified nicotine-containing vaping products and a separate category of electronic devices. The new measures bring additional product classifications into the scope of the changes, with potential implications for exporters, component suppliers, and international buyers.
For manufacturers that rely on China’s production ecosystem, the key issue is not simply a change in tax treatment. It is how businesses will adapt their export prices, procurement strategies, contracts, and financial planning as the new rules approach.
Which Vape Products Will Be Affected From April 2027?
The new policy identifies four additional customs commodity codes associated with vaping, nicotine, and other non-combustible inhalation products.
| Customs code | Product category described in the announcement and industry classification |
|---|---|
| 8543400010 | Vaping aerosolization devices and qualifying empty pods |
| 29397910 | Nicotine and its salts |
| 24041910 | A category of non-combustible inhalation products without tobacco or nicotine |
| 24041990 | Other non-combustible inhalation products classified under this code |
The official customs description and the product commonly associated with a code are not always identical. Exporters must determine the correct classification for their actual goods rather than assuming that every product marketed as a vape or nicotine alternative automatically falls under one of these codes.
The inclusion of code 8543400010 is particularly relevant to the vaping hardware supply chain. Based on industry classification information reported by 2Firsts, this category includes vaping devices and qualifying empty pods. The nicotine-related code could also affect businesses that supply raw materials to manufacturers of vaping and other nicotine products.
The policy takes effect based on the export date recorded on the customs declaration. Businesses with shipments scheduled around the implementation date should therefore review their logistics plans and documentation carefully.
How the 2027 Policy Builds on the 2026 Changes
The latest announcement is part of a wider adjustment to China’s export rebate treatment for selected vaping-related goods.
In January 2026, authorities announced that VAT export rebates would be removed for specified products under customs codes 2404120000 and 8543400090, with the changes taking effect on April 1, 2026. Industry classification information cited by 2Firsts associates these categories with nicotine-containing vaping products, including certain disposable devices, prefilled pods and bottled e-liquid, as well as a category of heated tobacco devices.
The 2027 policy adds four more relevant commodity codes, including the code used for vaping devices and qualifying empty pods.
This distinction matters because different products may fall under different customs classifications even when they are sold within the same broader nicotine market. Companies that manufacture devices, empty pods, e-liquid, nicotine ingredients, or heated tobacco products should not assume that the same tax treatment applies to every item in their portfolio.
The latest announcement also states that existing export consumption-tax refund and exemption arrangements for affected products subject to consumption tax will remain unchanged. The announced adjustment concerns VAT export rebates; it should not be described as the cancellation of every form of export tax relief.
What the Change Could Mean for Export Prices
An export VAT rebate can influence a company’s effective costs and working-capital position. When a qualifying product loses that rebate, the financial effect depends on its previous eligibility, input VAT, tax treatment, production costs, and commercial arrangements.
For vape manufacturers and exporters, several responses are possible.
1. Exporters May Reassess Their Pricing
Companies may review quotations for overseas customers as they calculate the financial effect of the policy. Some may seek to pass part of the additional cost to buyers, while others may absorb some of the impact to maintain customer relationships or defend market share.
Neither outcome is automatic. The extent to which prices change will depend on margins, competition, contract terms, and the bargaining power of buyers and suppliers.
2. Profit Margins Could Face Additional Pressure
Manufacturers already working with narrow margins may need to examine the profitability of individual product categories and export destinations. A business with multiple product lines could experience different effects depending on which customs codes apply and how its previous rebate treatment was structured.
Smaller suppliers may have less room to absorb cost changes than businesses with larger customer bases or more diversified operations. However, the actual impact will vary by company, and the announcement does not provide a forecast of losses or affected firms.
3. Procurement and Production Plans May Change
Manufacturers may reassess component sourcing, inventory levels, production scheduling, and the timing of shipments. These are possible commercial responses rather than outcomes confirmed by the announcement.
Companies with products that cross several customs classifications should pay particular attention to product documentation and the evidence supporting their declared codes. Incorrect classification can create compliance and financial risks that are separate from the policy change itself.
Why Customs Classification Is Now More Important
The same factory may produce several kinds of devices, pods, liquids, or nicotine-related products. Their commercial descriptions may sound similar, but their official customs classifications can differ.
The new rules make it important for exporters to establish which codes apply to each product and how the revised policy affects their previous VAT treatment.
Businesses should consider the following steps:
- Review product classifications: Check the technical specifications and customs descriptions for every exported product.
- Confirm previous rebate eligibility: Do not assume that all goods received the same rebate rate or treatment before the change.
- Update export contracts: Review price-adjustment clauses, delivery deadlines, and responsibility for changes in tax costs.
- Coordinate with customs and tax advisers: Obtain professional guidance for ambiguous classifications or complex product configurations.
- Plan around the effective date: Use the export date recorded on the customs declaration when assessing which policy applies.
These measures can help reduce uncertainty, but individual businesses should confirm their obligations with qualified advisers and the relevant authorities.
China’s Vape Export Market Remains Significant
The policy arrives as China continues to play a major role in the international vaping supply chain.
According to earlier customs-data analysis published by 2Firsts, China’s core e-cigarette exports reached approximately US$4.875 billion in the first half of 2026, an increase of 3.1% year over year. Exports of devices and vaporization hardware rose by 8.9% over the same period.
That hardware figure uses the broader HS85434000 category, which includes multiple device classifications. It should not be interpreted as the growth rate for the newly affected vaping-device code alone.
The figures provide useful context for the scale of the export sector, but they do not establish how much the new policy will reduce exports or whether overseas demand will change. Export values are also influenced by purchasing patterns, shipment timing, international regulation, exchange rates, and other commercial factors.
For that reason, the effects of the 2027 policy will become clearer as companies adjust and subsequent customs data becomes available.
To understand the historical importance of overseas demand, readers can also review our report on China’s e-cigarette exports to the United States in the first half of 2023.
What International Buyers Should Watch
Overseas importers and distributors may also need to prepare for changes in supplier quotations and contract negotiations.
Buyers sourcing vaping devices, empty pods, or nicotine ingredients from China can begin by asking suppliers whether their products fall within the newly affected customs codes and how the suppliers plan to manage the change.
It is also worth reviewing whether current quotations remain valid for shipments scheduled after March 2027. Where agreements extend beyond the implementation date, both parties should understand how changes in tax costs will be handled.
Importers should avoid assuming that every supplier will increase prices by the same amount. The outcome depends on each supplier’s product mix, margins, contractual commitments, and export arrangements.
As China’s export tax policies evolve, manufacturers may need to reconsider their international growth strategies, including the transition discussed in our article on China’s vape brands expanding overseas.
What Remains Unchanged?
One important detail can easily be overlooked: Announcement No. 29 of 2026 does not cancel the existing export consumption-tax refund and exemption arrangements for affected products subject to consumption tax.
The new rule removes VAT export rebates for the specified goods from the stated effective date. It is therefore more accurate to describe the measure as a change to VAT export rebate eligibility than as a blanket ban on vaping exports or the abolition of all export tax benefits.
The announcement also does not state that vaping manufacturing or exports will stop. Rather, it changes the tax treatment of listed product categories. Businesses will need to assess the financial and operational consequences based on their individual circumstances.
Conclusion: Prepare for the 2027 Deadline
China’s planned removal of additional VAT export rebates from April 1, 2027, marks another important adjustment for the country’s vaping and nicotine supply chain. The inclusion of vaping devices, qualifying empty pods, nicotine and its salts, and specified non-combustible inhalation products broadens the scope of the earlier 2026 measures.
For manufacturers, the immediate priority is to verify customs classifications, reassess product-level costs, and prepare for contract and pricing discussions. International buyers should review delivery schedules and ask suppliers how the policy may affect shipments after the effective date.
The precise commercial impact remains uncertain. It will depend on product classification, previous tax treatment, company margins, and market conditions. What businesses can do now is establish which products are affected and plan their export operations around the official implementation date.