New EU environmental taxes

On 27 May 2020, the European Commission presented a proposal for a major recovery plan “Next Generation EU” (NGEU) worth EUR 750 billion, which will be part of the long-term EU budget.

New taxes

The largest incentive package ever funded from the EU budget will be covered by new fiscal instruments. The most discussed measures are the carbon border adjustment mechanism (the “carbon duty”), the digital levy, the financial transaction tax, the market access tax and the levy on non-recycled plastic packaging waste.

Levy on non-recycled plastic packaging waste

From 1 January 2021, a levy of EUR 800 per tonne will be applied to non-recyclable plastic packaging within the EU. EU Member States were free to decide how to implement this obligation. In 2021, most Member States decided to cover their contribution directly from their state budgets, but it is likely that many of them will impose a new tax on plastic packaging products in the future. In particular, the new measure could impact companies operating in the retail and consumer goods, chemicals and packaging sectors, as well as industries using plastic packaging.

Implementation in Slovakia

In Slovakia, currently there is no new tax, and the levy has not yet been passed on to businesses or consumers. Slovakia decided to meet this requirement through a one-off contribution from the state budget in the amount of approximately EUR 30 million, which is the estimated fee for 37 million tonnes of non-recyclable plastics. This is good news for companies operating in the packaging sector in Slovakia, which are currently preparing for the plastics deposit scheme.

What we expect

The specific impact of the plastics tax depends on how it will be collected in each Member State and how these Member States decide to implement the Directive. The key question remains: Who will be the final payer of the plastics tax? Producers of non-recyclable plastics, companies using plastics in the production of products, or sellers of non-recyclable plastics. When the government transfers this obligation to the business sector, a subsequent transfer to the consumer is expected. Additional questions arise in connection with the waste statistics and discrimination against plastics in comparison to other packaging materials.

What will the impact be?

Companies that may be subject to any new plastics tax should assess the possible impact on their activities. The burden will not only be fiscal, there will also be a compliance burden due to the obligation to comply with new, or not previously applicable, legislation (eg legislation on plastic packaging). We recommend considering the possible impact on individual product categories, their prices, value chain and administrative requirements and tax obligations.

We will continue to follow this topic and will keep you updated on the issue and legislative processes at European and national level. If you have any questions, please don’t hesitate to contact our experts.

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