Tax on legal weed repealed

The Swiss Federal Court has ruled that cannabis – the legal, low-THC version – should not be subject to the tobacco tax.

Responding to the complaints of three cannabis production companies, the court found that there was no legal basis for a 25% tobacco tax on the sales price of cannabis. The tax will be dropped immediately.

In Switzerland, cannabis with a tetrahydrocannabinol (THC) content of less than 1% is legal. It is sold as oil, tea or directly in its flower form. Cannabis blossoms are not explicitly mentioned in tobacco tax legislation, the Federal Court stated in its ruling, which was announced on Tuesday.

This overrules last year’s decision by the Federal Administrative Court to uphold the Federal Customs Administration’s classification of legal pot as a tobacco substitute.

As the Federal Court pointed out, the three companies challenging that ruling don’t sell products for smoking. More typically their products are to be consumed for health benefits, such as the relief of rheumatic pain.

The court also noted that while you could smoke the hemp in question, it would hardly have the characteristics of tobacco.

The plaintiffs will be reimbursed for the period during which their products were taxed at the 25% tobacco rate.