New tax on plastic packaging from 1 January 2021
New tax on plastic packaging
The European Council has announced a tax of 0.8 euro / kg for non-recycled plastic packaging waste starting in 2021, as part of the post-Covid-19 economic recovery package, estimated at 750 billion euros for the period 2021-2027*.
This measure had actually been planned pre-Covid, and was first announced in a press release issued by the European Commission in May 2018 in relation to the budget for the period 2021-2027.
This tax is intended to supplement the EU's own revenue and will be paid by EU Member States, based on the amount of non-recyclable plastic packaging waste in each country. Thus, Member States are free to decide how to implement it, and while some states may decide to pay the contribution to the EU from their national budget, it is likely that many will impose a new form of taxation on plastic packaging products, which will lead to different regimes across the EU.
This tax should be applied from 1 January 2021. Consequently, we expect more details to be published in the near future, probably in the form of a legislative proposal, mentioning the products that will fall within the scope of the tax, the collection mechanism, possible exemptions as well as related reporting obligations.
How will the tax be implemented in Romania?
So far, the Romanian authorities have not published any draft legislation, nor have they announced how they will implement the 0.8 euro / kg tax on non-recycled plastic packaging waste, i.e. whether they intend this tax to be borne by the state budget or if a new tax will be imposed on Romanian companies.
If the authorities choose to introduce a new environmental tax, there are several implementation options, such as for the tax to be borne by the producers of plastic packaging or by companies whose products are packaged in plastic or by companies which sell consumer products.
Currently there already is a tax of 2 lei / kg on plastic packaging, payable by companies that place packaged goods on the market, for the difference between the annual recycling / recovery objectives (compared to the quantities of plastic packaging introduced on to the market) and the quantities of packaging waste handed over for recycling / recovery.
Thus, the authorities may decide to amend this tax, or introduce an additional tax, in order to collect and redirect to the EU budget the 0.8 euro / kg for non-recycled plastic packaging waste.
There are currently several uncertainties about this tax, but we expect the new measures to affect many companies, such as those in the retail and consumer goods sector, manufacturers of plastic packaging and other industries that use plastic packaging.
This measure should act as an encouragement for Member States to improve their recycling capacities, but it may affect competition at European level, depending on how it is implemented in each Member State.
What should be done?
Given the very short period remaining until 1 January 2021, when this measure will be implemented, we recommend that companies that could be targeted by this measure should consult within the professional associations of which they are part.
These companies should analyse the impact that this measure could have on their activity and, identify the most appropriate implementation options which could be introduced in legislation to ensure clarity, predictability, efficiency and effectiveness, in the interests of protecting the environment, and also so that the legislation will work well from the point of view of business and the authorities.
How can we help
KPMG will follow up and inform you about the steps that will be taken by the authorities in the coming period, including the initiation of legislative proposals both at national level and in other EU countries.
Furthermore, when this plastic tax is implemented in national legislation, KPMG specialists will be able to provide assistance to the companies affected by this measure to give support on interpretation and application of the legislation.
*In addition to introducing a contribution for non-recycled plastic packaging waste, the EU Council announced that the Commission will present a proposal for a measure to adjust carbon dioxide emissions and a digital tax, both of which will be introduced no later than 1 January2023.
©2021 KPMG România SRL, a Romanian limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance.