The new Tax on Non-Reusable Plastic Packaging

2022-12-28

Barring a major surprise, next January 1st will see the entry into force of the new Excise Tax on non-reusable Plastic Packaging. In recent weeks, critical voices have increased with this new tax figure, pressing for its suspension or postponement, but today everything seems to indicate that the planned schedule for this tribute, which already has a budget reflection, will be fulfilled, while the Tax Agency continues to update and complete the digital tools for its management.

It is a complicated tax in terms of its management by taxpayers. The amount and complexity of information to be provided and the diversity of assumptions in which it applies (and its exceptions), make it a challenge to try to offer a summary of this tribute, which we try to undertake in this article.

First of all, the products taxed by this Tax are, in essence, the following:

• Non-reusable containers containing plastic. Containers are considered articles designed to contain, protect, handle, distribute and present goods, whether primary, secondary, or tertiary containers (packaging, film …), empty or containing product. Regarding the concept of non-reusable, it is much more given to interpretation, limiting the norm to pointing out that they are those that “have not been conceived, designed, and marketed to perform multiple circuits or rotations throughout their life cycle, or to be refilled or reused for the same purpose for which they were designed”.
• Semi-finished plastic products intended for obtaining the above containers (preforms, thermoplastic sheets …).
• Products containing plastic intended for the closure, commercialization or presentation of the above containers (stoppers, closures, packaging …)

It should be noted that some products of doubtful fit are identified in which it is established (either in the Law itself or by the Tax Agency) that they are not subject to tax, such as paints, inks, lacquers and adhesives incorporated in the products or packaging that are removed with own use (for example, soluble detergent capsules), among others.

Also, certain containers intended to contain or protect medicines, medical devices, food for special medical uses, infant formula for hospital use or hazardous waste of sanitary origin, as well as plastic rolls used in bales or bales for silage of fodder or cereals for agricultural or livestock use, will not be taxed, as they are exempt.

On the other hand, it is vitally important to highlight that this Tax affects not only the manufacturers of the products subject to it, but also those who carry out their import or intra-Community acquisition, taxing, in short, their use in Spanish territory. And all of them are imposed relevant obligations both in terms of settlement and payment of tax, as well as the provision of information to the Tax Agency, with certain exceptions.

Thus, those imports or intra-Community purchases of non-reusable plastic containers whose amount of plastic accumulated in a month does not exceed 5 kilograms, will also be exempt from the tax.
Since the purpose of this tax is to tax the consumption of non-reusable plastic in Spanish territory, it is established that the manufacture, import, or intra-Community acquisition of products that are sent to foreign territory, will not be taxed (being considered either not subject or exempt) or if the tax had already been satisfied for such operations, it could be subject to deduction or refund, according to the mechanism established in each case. The same would happen with those products that have ceased to be suitable for use or are destroyed under certain circumstances.

The tax is paid by taxpayers (manufacturers, importers or those who make intra-Community acquisitions of the aforementioned products) to the Tax Agency by means of a self-assessment (form 592) to be submitted periodically, with the same frequency and deadlines as the Value Added Tax settlements. Except in the case of imports, the settlement of which is carried out in accordance with customs regulations, through the DUA itself.

In those cases in which you have the right to the deduction of the tax paid previously, it may be applied in the self-assessments of the following four years, or request its refund in the last period of the year, in a similar way to that established in the VAT.

Additionally, refunds by importers or other assumptions will be requested each period by means of the A22 form approved for this purpose. The latter case could be applicable to purchasers of products taxed by the tax that prove the shipment of those products outside Spanish territory, their condition for sanitary use, or that they can be reused.

The amount to be paid is € 0.45 for each kilogram of non-recycled plastic contained in the packaging/ product subject to the tax. The amount of recycled plastic, if any, is not included, but for this it must be certified by an accredited entity for this purpose, although in the case of manufacturers (who will have to pass on the tax on their invoice to their customers), during the first twelve months from the entry into force of the tax, their responsible declaration would suffice.

This will entail management obligations that are difficult for all taxpayers of this tax to assume, but especially for those who make imports and intra-Community acquisitions, since they will have to request their foreign suppliers to inform them on the invoice the amount of kilograms of plastic contained in the containers and packaging of the purchased product, as well as the part that corresponds to non-recycled plastic.

But formal and managerial obligations are not limited to the above. Taxpayers acting as manufacturers or intra-Community acquirers must request their registration before the start of their activity in the Territorial Registry, obtaining an Identification Code of the Plastic associated with each of their establishments.
Additionally, in the month following each settlement period, they must carry out the electronic supply to the Administration of their stocks of subject products and operations carried out in said period with an impact on this tax. To facilitate adaptation, this obligation can be deferred during the first six months of the year 2023, providing at the end of that term the accumulated information of the entire financial year.

In short, it is a tax whose calculation is very complex, since it will not always be easy to have information on the kilograms of plastic per unit of product, discriminating according to whether it is recycled or non-recycled plastic (with the necessary justifications), and also considering non-subject or exempt operations. And that will inevitably result in an increase in prices, both due to the impact of the product tax, and due to the increase in indirect and management costs for taxpayers.

A whole challenge that, again, will profoundly affect not only the plastic sector but many other companies that acquire packaging or product marketed in non-reusable plastic packaging.