Law 7/2022, of April 8, on waste and contaminated soils for a circular economy, incorporates a new Special Tax on non-reusable plastic packaging, which will come into force on January 1, 2023. This is a tax with a wide impact, as it will affect not only companies dedicated to the manufacture or distribution of packaging, but also any importer or intra-community acquirer of plastic packaging.
The Official State Gazette (BOE) of April 9th published Law 7/2022, of April 8th, on waste and contaminated soils for a circular economy (Law 7/2022) creates the Special Tax on non-reusable plastic packaging and the Tax on the deposit of waste in landfills, incineration and co-incineration of waste, which will come into force on January 1, 2023.
Furthermore, it requires local authorities to establish a fee related to waste treatment, modifies the regulation of the fee for the use of inland waters for the production of electricity, and introduces modifications to the VAT regime for product donations.
Next, we will focus on the new Special Tax on non-reusable plastic packaging, which will have a wide-ranging impact, affecting not only companies that manufacture or distribute packaging, but also any importer or intra-Community purchaser of plastic packaging (with or without contents). An individualized analysis of the material and formal impact of these new provisions on businesses and distribution chains will be necessary. Currently, its regulatory implementation has not yet been established.
Special tax on non-reusable plastic packaging
The Tax on Plastic Packaging is defined as an indirect tax levied on the use, within the territory where the Tax applies ("TAI"), of non-reusable packaging containing plastic. This tax will apply throughout Spain, without prejudice to the special tax regimes of the Basque Country and Navarre.
Objective scope and taxable event
The new tax applies to the manufacture, import, or intra-Community acquisition of non-reusable packaging containing plastic, whether empty or containing, protecting, handling, distributing, or presenting goods. Packaging made of more than one material that contains plastic will be taxed based on the amount of plastic it contains.
It is reusable, and therefore will not be taxed, if it is a container conceived, designed and marketed for multiple circuits or rotations or to be refilled or reused for the same purpose for which it was designed.
The tax also applies to the manufacture, import, or intra-Community acquisition of semi-finished plastic products intended for the production of non-reusable packaging (e.g., preforms or thermoplastic sheets), as well as other products containing plastic intended to enable the closure, marketing, or presentation of non-reusable packaging. To avoid double taxation, the regulations stipulate that the production of packaging exclusively from these products will not be considered manufacturing.
In addition to manufacturing, imports, and intra-Community acquisitions, the irregular introduction into the Spanish Customs Territory (TAI) of the aforementioned products, which fall within the scope of the tax, is also subject to this tax. This taxable event occurs when the possessor cannot prove their manufacture, import, or intra-Community acquisition, or their prior acquisition within Spanish territory. Therefore, it is advisable to keep the necessary documentation to prove these facts.
Accrual
- In the case of manufacturing: at the time of the first delivery or making available to the purchaser. In the case of advance payments, this is brought forward to the moment of total or partial collection of the price for the amounts actually received.
- In the case of imports: at the time when the accrual of import duties would have taken place (admission of the customs declaration).
- In cases of intra-community acquisition: the 15th day of the month following the month in which the dispatch or transport of the products begins, except in cases of prior issuance of an invoice, which in this case takes place on the date of issuance of the same.
Cases of non-liability and exemptions
The Law regulates several cases of non-taxability and exemptions that will result in no taxation. Specifically, it stipulates, among other cases, that the manufacture, import, or acquisition of paints, inks, lacquers, and adhesives intended to be incorporated into products that fall within the scope of the tax will not be subject to the tax. Nor will the manufacture of products intended for shipment outside the Spanish Tax Agency (TAI) be subject to the tax
Small imports or intra-community acquisitions of packaging will be exempt from taxation , that is, those whose total weight of non-recycled plastic does not exceed 5 kilograms in a month .
The tax also exempts products intended for the containment, protection, handling, distribution, and presentation of medicines, medical devices, foods for special medical purposes, infant formula for hospital use, or hazardous healthcare waste, as well as plastic rolls for silage used in agriculture and livestock farming. Intra-Community acquisitions are also exempt, among other cases, when products are destined for a territory other than the TAI (Taxable Area of Intra-Community) before the deadline for filing the corresponding tax return.
Taxpayers
persons and entities of article 35.4 of the LGT (communities of property, dormant inheritances…) that carry out the manufacture, import or intra-community acquisition of containers that, containing plastic, are not reusable except in cases of irregular introduction, which will be the person who owns, markets, transports or uses said products.
Taxable base and rate
The taxable base will consist of the amount of non-recycled plastic, expressed in kilograms, contained in the products subject to the tax.
The tax rate will be 0.45 euros per kilogram.
Deductions and refunds
Manufacturers and intra-community purchasers may, in the self-assessment corresponding to each settlement period, reduce the amount of tax paid in certain cases from the accrued fees.
The Law establishes, in certain cases, a system for refunding the tax paid on imports.
Likewise, purchasers of the subject products will have the right to request a refund of the tax paid, in certain cases.
General management standards
Settlement: The settlement period will be monthly or quarterly, depending on the taxpayers' VAT settlement period. For imports, the tax will be settled in the manner prescribed for customs debt.
Registration: Obligation to register, prior to commencing business activity, in a territorial register. Representatives in Spain of taxpayers not established in Spanish territory are also subject to this obligation.
Accounting obligations: Manufacturers must keep accounts using an electronic accounting system, through the Spanish Tax Agency's (AEAT) online portal, submitting electronic entries for the accounting entries of products subject to the tax, and, where applicable, for the raw materials necessary for their production. However, those making intra-Community acquisitions will only need to keep a stock register, which they must submit to the tax office.
Obligations arising from sales or deliveries (invoicing):
- In the first sale or delivery made after manufacturing: manufacturers must pass on to the purchaser the amount of the tax due on the sale or delivery, and must separately state in the invoice they issue: a) the amount of the tax due; b) The amount of non-recycled plastic contained in the products, expressed in kilograms, and c) the article under which the sale or delivery is exempt, if any exemption applies.
- In all other sales or deliveries, upon request of the purchaser, the following must be recorded on a certificate or on the invoices issued for said sales or deliveries: a) the amount of tax paid on said products or, if applicable, specifying the article under which said tax benefit was applied; and b) the quantity of non-recycled plastic contained in the products, expressed in kilograms. The foregoing does not apply when simplified invoices are issued (Art. 7.1 of the Regulations governing invoicing obligations).
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