Interest Note 1/2023: Notes about the new indirect tax on non-reusable plastic packaging

On 1st January 2023, came into force the special indirect tax on non-reusable plastic packaging.

We are currently waiting for the approval of the Regulation that could clarify some doubts regarding the application of this new tax, but meanwhile, we summarise the main features of this new tax on non-reusable plastic packaging.

1. Taxable persons

Natural persons, legal entities, communities of property and civil societies that manufacture, import, and acquire from the European Union (EU) countries packaging, semi-finished products, and shaped closure elements that are non-reusable and made of non-recycled plastic.

This new tax will be levied both on plastic packaging acquired empty and on plastic packaging acquired containing or protecting any other product.

2. Definition of non-reusable plastic packaging

Packaging is considered non-reusable when it has not been conceived, designed, and placed on the market for doing multiple rotations throughout its life cycle, or for refilling or reuse for the same purpose for which it was originally designed.

Therefore, this tax is not levied on:

a) The use of reusable plastic packaging.

b) The use of packaging which does not contain plastic.

c) Recycled plastic contained in the packaging.

3. Exemptions

The manufacture, importation or intra-Community acquisition of non-reusable packaging:
a) Which are intended for health purposes or for medicinal products.

b) Which are intended for re-export outside Spain.

c) That are no longer useful or have been destroyed, and this has been informed to Spanish Tax Administration.

d) Imports and intra-Community acquisitions whose combined weight does not exceed of 5 kg/month of non-recycled plastic.

In the event that these exemptions are met after the expiration of the deadline for filing the tax return, the amount paid for these products may be deducted from the next tax return.

4. Accrual of the tax

• Manufacture of non-reusable packaging: when the first delivery is made.

• Importation of non-reusable packaging: when the customs duties are due.

• Intra-Community acquisition of non-reusable packaging: on the 15th day of the next month in which the dispatch or transport of the non-reusable packaging begins, unless the corresponding invoice has been issued previously.

5. Tax base and tax rate:

The tax base is the amount of non-recycled plastic, measured in kilograms, contained in non-reusable packaging. The amount of recycled plastic will not be included in the tax base whether derived from a mechanical or chemical process.

The tax rate applicable is equal to € 0.45 per kilogram of non-recycled plastic.

6. Entitlement to refund of tax paid

Importers and purchasers who are not taxpayers but paid this tax to manufactures and to Customs, and met the aforementioned exemptions are entitled to apply for a refund of the amount paid. In addition, those who can prove that after making some modification to the packaging it can be reused, they may also apply for a refund.

7. Formal obligations

1. Taxpayers who are manufacturers or intercommunity purchasers must submit the tax return, using form 592.

2. The tax return period should be quarterly, unless the VAT tax return period is monthly.

3. Taxpayers must be registered into the Territorial Register established by the Ministry of Finance.

4. Manufacturers must keep an accounting of the products and raw materials object of this tax by using a computerised system through the official web of the Spanish Tax Administration.

5. Intra-Community purchasers shall keep a stock record, which they shall submit to Spanish Tax Administration, in accordance with the procedure and within the deadlines determined.

6. Importers shall inform about the quantity of non-recycled plastic imported, expressed in kilograms, in the appropriate section of the customs import declaration.

7. When manufacturers sell plastic packaging, they must invoice their customers the amount of tax paid for non-reusable plastic packaging. Moreover, it should be clearly and separately informed on the invoice:
   • The tax passed on to customers
   • The quantity of non-recycled plastic contained in the products, expressed in Kilograms.
   • If any exemption applies, it should be specified the article of the Law that allows this exemption.

8. Penalties for non-compliance with tax obligations

1. Not make the registration into the Territorial Register: fixed penalty of €1,000.

2. False certification regarding the quantity of recycled plastic on the products: 50% of the amount not paid.

3. Improper exercise of tax exemptions: 150 % of the amount not paid.

4. Inform incorrectly on the invoice the quantity of non-recyclable plastic on the product: €75 per invoice.

9. Conclusions

Not only taxpayers who manufacture non-recycled and non-reusable plastic packaging must declare, pay, and comply with the formal obligations of the new tax, but also those taxpayers who import and make EU acquisitions of non-reusable and non-recycled plastic packaging are subject to the tax obligations of this new tax.

Therefore, all those companies that make purchases in the European Union or in third countries of products whose non-reusable and non-recycled packaging exceeds 5kg/month, must pay this new tax, and comply with formal obligations derived from this new tax.

We keep at your disposal to answer any questions related to the entry into force of the new tax on non-reusable plastic packaging.