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The new tax on plastic bags

The new tax on plastic bags

On 1 March 2020, a new tax on plastic bags came into force in Sweden. However, the actual tax liability will be due from 1 May 2020.

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Joachim Broberg

Skatterådgivare / Ansvarig mervärdesskatt ideell sektor

KPMG i Sverige

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What is the new tax on plastic bags?

The new tax on plastic bags aims to decrease the number of plastic bags for consumer use.

The tax rate is SEK 3 per standard plastic bag and SEK 0.3 per smaller plastic bag. A smaller plastic bag is defined as a bag which has a thickness below 15 micrometers and a maximum volume of 7 liters, typically thin plastic bags provided in grocery stores for fruits or vegetables.

Who is affected by the new tax on plastic bags?

The tax is due when a plastic bag is commercially produced or brought into Sweden from another country. The tax should be reported to the Swedish Tax Agency except when the goods are imported from a non-EU-country, where the Swedish Customs Agency is the responsible authority. Moreover, companies that produces or bring in plastic bags to Sweden may still also need to report the amounts of plastic bags to the Swedish Environmental Protection Agency.

A plastic bag created to have a longer life span might be exempted from the tax. The exemption also applies when the number of plastic bags produced or brought to Sweden does not exceed 40 per occasion or when a private individual brings plastic bags into Sweden for personal usage.

Warehousers

From 1 March 2020 it is possible to register as a warehouser at the Swedish Tax Agency. By doing that a company can store the bags under excise duty suspension. As warehouser, a company may file the tax returns on a monthly basis rather than reporting each time bags are brought into Sweden. For warehousers, the tax is due when the plastic bags are sold to someone who is not a warehouser, or when a warehouser moves the plastic bags to a store for sale purposes.

KPMG Comments

The tax on plastic bags was strongly criticized already before it came into force, and there is a lot of discussions on whether the tax will actually affect the use of plastics in the aimed direction. A plastic bag in a normal Swedish grocery store costs approximately about SEK 2.50. A tax rate of SEK 3 will in practice double the consumer price. According to Swedish Environmental Protection Agency, every swede approximately used 102 plastic bags during the year of 2018 and it in our view it is reasonable to believe that the tax will change the behavior of the consumers.

For the affected companies, the incentive to provide alternative products to plastic bags is high on a business level. On a compliance level we see that it is important to plan ahead on how to administratively handle the new tax. For those who has not already begun their work of planning for the new tax, now is the time!

When the Swedish chemical tax on electronic products and white goods was new, our experience was that many companies needed to set whole new processes since the consumer electronic sector had previously not been exposed to excise duties at all. Experiences from this tax has shown that in many cases, it is favorable to be registered as a warehouser.

What KPMG can do for you?

We can assist with for example:

  • analyze how the tax will affect your flow of goods and pricing models
  • analyze pro’s and con’s with being registered as warehouser 
  • register your company as a warehouser
  • assist to set up compliance processes


Please contact us if you have any questions or would like to discuss.

Read more:
The article in Swedish


Joachim Broberg

+46 8 723 97 82
joachim.broberg@kpmg.se

Josefin Knutsson
+46 8 723 94 96
josefin.knutsson@kpmg.se

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