The Tax on Non-Reusable Plastic packaging

On 1 January 2023, the tax on non-reusable plastic packaging will come into force. This is a new state tax, the purpose of which is to prevent the generation of non-reusable plastic packaging waste and to encourage the recycling of plastic waste, thus contributing to the circular economy in the field of plastics.

Target scope: The following products will be subject to the tax, whether empty or whether containing, protecting, handling, distributing and presenting goods:

1. Non-reusable packaging containing plastic;
2. Semi-finished plastic products intended for the production of packaging (preforms, thermoplastic sheeting); and
3. Plastic products enabling packaging to be closed, marketed or presented.

The taxable base of the tax will not include the quantity of recycled plastic.

To give an example, both the non-recycled plastic of a bottle of milk and the non-recycled plastic that groups together a pack of several bottles, as well as the non-recycled plastic itself protecting the pallet containing several packs of milk bottles, would be subject to the tax.

Taxable event and chargeable event: The tax is levied on the use of plastic packaging in Spain in the following cases:

1.  The manufacturing of products forming part of the target scope.
   In this case, the chargeable event will occur with the first delivery in Spain, although it will be brought forward in the case of advance payment.
2. The importing of products forming part of the target scope.
   The chargeable event occurs when the import SAD (Single Administrative Document) is accepted.
3. The intra-community acquisition of products forming part of the target scope.
   The tax becomes chargeable on the 15th day of the month following that in which the transportation or dispatch to the buyer begins, or at the time of dispatch if this is earlier.

Tax rate: €0.45 per kilogram of non-recycled plastic.

Tax benefits:

1. Non-liability

• The manufacturing of products subject to the tax when they are destroyed or rendered unsuitable for use prior to the chargeable event.
• The manufacturing of products subject to the tax when they are intended to be sent directly out of Spanish territory by the manufacturer or by a third party in its name or on its behalf.
• The manufacturing, import or intra-community acquisition of paints, inks, lacquers and adhesives designed to be incorporated into the products forming part of the target scope.
• The manufacturing, import or intra-community acquisition of non-reusable packaging containing plastic when it is not designed to be delivered together with the goods.

       2. Exemption

• The manufacturing, import or intra-community acquisition of non-reusable plastics when they are intended for medicines, medical devices, foodstuffs for special medical purposes, infant formula for hospital use or hazardous waste of a medical origin are exempt from the tax.
• The manufacturing, import or intra-community acquisition of plastic rolls used in bales for silage of fodder or cereals for agricultural or livestock use are exempt.
• The intra-community acquisition of products subject to the tax when, prior to the deadline for filing the corresponding self-assessment, they are intended to be sent directly outside Spanish territory.
• The intra-community acquisition of products subject to the tax when they are destroyed or rendered unsuitable for use before the end of the deadline for filing the corresponding self-assessment.
• The import or intra-community acquisition of non-reusable packaging when the total weight of non-recycled plastic contained therein does not exceed the limit of 5 kg in one month.
• The manufacturing, import or intra-community acquisition of plastic products when they are not intended to enable the closure, marketing or presentation of non-reusable packaging.

       3. Deduction

– Intra-community buyers can deduct the tax paid on the intra-community acquisition when the products purchased:

• Are sent outside the Spanish territory.
• Are destroyed or become unsuitable for use prior to their first delivery in Spanish territory.
• Are returned after they have been supplied or made available in Spanish territory.

– Manufacturers of products subject to the tax may deduct the tax paid upon delivery or availability when they are returned for destruction or reincorporation into the manufacturing process.

This deduction will take place in the self-assessment corresponding to the period in which the circumstances giving rise to it occur, reducing the tax due in that settlement period.

If the deduction amount is greater than that of the tax payable, the following options are available:

1. Offset the excess in subsequent self-assessments within the following four years; or
2. Request a refund of the existing balance in favour of the taxpayer

Settlement and payment of the tax: Manufacturers and intra-community buyers are obliged to submit a self-assessment on a monthly or quarterly basis, based on the VAT settlement period.

In the case of imports, the tax will be settled by customs duty.

Other obligations:

1. Registration: Taxpayers must register in a Territorial Register, after which they will be assigned a plastic identification code (CIP [código de identificación del plástico]).

This is not mandatory for importers and intra-community buyers only making purchases that are exempt because they do not exceed the threshold of 5 kg of plastic per month.

The registration application must be made within 30 days after the entry into force of the Ministerial Order, which is still being processed.

2. Representative: Non-established taxpayers must appoint a representative before the AEAT (Spanish State Tax Administration Agency), who must also be registered in the Territorial Tax Register.

3. Accounting obligations: Manufacturers must keep accounts of the products obtained and intra-community buyers must keep an inventory book.

A Ministerial Order, pending approval, will regulate the procedure and deadlines for compliance with these obligations.

4. Recycled plastic: The quantity of recycled plastic contained in the products forming part of the target scope of the tax must be accredited by an entity authorised to issue certification in accordance with the UNE-EN 15343:2008 standard.

A transitional regime of 12 months is anticipated, in which the quantity of non-recycled plastic contained in the products within the target scope can be demonstrated by means of a responsible declaration signed by the manufacturer.

Tax Department of 3.0 ADVOCATS I ASSESSORS FISCALS, S.L.P

November 2022.