New tax on non-reusable plastic packaging

Given the proximity of the entry into force of the tax – 1 January 2023 – and given that its impact may affect many companies, we believe it is important to recall the main aspects of this tax.

The tax is levied on the use in Spanish territory of non-reusable packaging containing non-recycled plastic, whether it is presented empty or whether it is presented containing, protecting, handling, distributing and presenting goods.

Thus, non-reusable packaging containing non-recycled plastic is subject to the tax, provided that it is designed to contain, protect, handle, distribute and present goods. It is irrelevant whether they are empty or whether they are presented with the function for which they were designed.

Excluded are those which, being an integral part of the goods, are necessary to contain, support or preserve them throughout their life cycle and are intended to be used, consumed or disposed of together with the goods (e.g. coffee capsules). Semi-finished plastic products intended for the production of such packaging and products containing plastic intended to enable their closure, marketing or presentation are also covered.

Semi-finished products are those obtained from raw materials which have undergone one or more processing operations and which require one or more further processing operations before they can be used as packaging. Examples are preforms or thermoplastic sheeting.

As regards the geographical scope of application, it should be noted that it refers to the whole of Spain. Having determined the objective scope of the tax, it is necessary to focus on who is considered to be a taxable person:

• Manufacturers
• Intra-Community purchaser
• Importer
• Irregular acquirer

As regards the accrual of the tax, the following is established for each of the cases: In manufacturing, the accrual of the tax occurs with the first delivery or making available, in Spanish territory, of the manufactured products or with the total or partial collection of the price, if payments are made in advance of the delivery or making available of the manufactured products.

This last point should be taken into consideration, since the subsequent delivery will only be affected by the part that has not been paid in advance.

Delivery or making available is presumed, in the absence of proof to the contrary, when differences in the stock of manufactured products are found.

On importation, the chargeable event occurs at the time when the import duties become due in accordance with customs legislation. In the case of intra-Community acquisition, the tax becomes chargeable on the 15th day of the month following that in which transport or dispatch to the purchaser begins or at the time of issue of the invoice, if earlier.

Lastly, in the case of irregular possession, the tax becomes chargeable at the time of the irregular introduction and, if this is not known, in the earliest non-prescribed tax assessment period, unless it is proven that it corresponds to another one.

The taxable amount of the tax is the quantity of non-recycled plastic, expressed in kilograms, contained in the products subject to the tax. If recycled plastic products are purchased, it is required that such nature is certified by a duly accredited entity.

Failure to comply with this requirement, or if such certification is incorrect or false, entails the tax penalty of a proportional pecuniary fine of 50% of the amount not paid and a minimum of 1,000 euros (this percentage may be increased by 25% in the event of repeated commission).

However, on a transitional basis, during the 12 months following the application of the tax, i.e. until 31 December 2023, the amount of non-recycled plastic contained in the products subject to the tax may also be accredited by means of a declaration of responsibility signed by the manufacturer.

After this deadline, as mentioned above, the reference certificate will be required. We therefore recommend that, where possible, contracts with suppliers should be amended to require such a document. Two considerations should be made in this regard.

Firstly, that when the taxed product is composed of plastic and other materials, the product is only taxed on the non-recycled plastic it contains.

Secondly, when the product subject to the tax, for which the tax has already accrued, incorporates other plastic elements that become part of the product, the product is only taxed on the non-recycled plastic contained in the incorporated elements.

The applicable tax rate is 0.45 euros per kilogram of non-recycled plastic contained in the products subject to the tax. Consequently, the total tax liability will result from applying the above-mentioned tax rate to the taxable base.

Notwithstanding the above, the regulation establishes a series of cases of non-applicability:

• The manufacture of products subject to the tax when they are destroyed or rendered unsuitable for use prior to the accrual of the tax.
• The manufacture of products subject to tax when they are intended to be sent directly out of Spanish territory by the manufacturer or by a third party in his name or on his behalf.
• The manufacture, importation or intra-Community acquisition of paints, inks, lacquers and adhesives designed to be incorporated into the products covered.
• The manufacture, importation or intra-Community acquisition of non-reusable packaging containing plastics, when it is not designed to be delivered together with the goods.

Likewise, a series of cases of exemption are established depending on the destination of the product:

• The manufacture, importation or intra-Community acquisition of non-reusable packaging containing plastic when it is intended for use in medicines, medical devices, foodstuffs for special medical purposes, infant formulae for hospital use or hazardous waste of medical origin.
• The manufacture, importation or intra-Community acquisition of semi-finished plastic products when they are intended to be used as packaging for medicinal products, medical devices, foodstuffs for special medical purposes, infant formulae for hospital use or hazardous waste of medical origin.
• The manufacture, importation or intra-Community acquisition of products containing plastic when they are intended to enable the closure, marketing or presentation of single-use packaging for medicinal products, medical devices, foodstuffs for special medical purposes, infant formulae for hospital use or hazardous waste of medical origin.

In these three cases of exemption, the purchaser must confirm the destination of the product beforehand. In the event that the destination of the product is different, the purchaser is liable to a proportional fine of 150% of the tax not paid and a minimum amount of 1,000 euros.

Other cases of exemption:

• The importation or intra-Community acquisition of non-reusable packaging containing plastic, the function of which is focused on medicinal products, medical devices, foodstuffs for special medical purposes, infant formulae for hospital use or hazardous waste of medical origin.
• The manufacture, importation or intra-Community acquisition of plastic rolls used in bales or bales for silage of fodder or cereals for agricultural or livestock use.
• The intra-Community acquisition of products which, prior to the deadline for filing the corresponding self-assessment, are intended to be sent directly out of Spanish territory by the intra-Community acquirer or by a third party in his name or on his behalf.
• The intra-Community acquisition of products when they are destroyed or become unsuitable for use before the end of the deadline for filing the corresponding self-assessment.
• The importation or intra-Community acquisition of non-reusable packaging when the total weight of non-recycled plastic contained therein does not exceed 5 kilograms in one month. In the case of importation, the SAD must indicate that this exemption applies.
• The manufacture, importation or intra-Community acquisition of semi-finished plastic products when they are not intended to be used to obtain non-reusable packaging containing plastic.
• The manufacture, importation or intra-Community acquisition of products containing plastic when they are not intended to enable the closure, marketing or presentation of non-reusable packaging containing plastic.

In these last two cases of exemption, if the products are delivered or made available, the destination will be accredited by means of a prior declaration by the purchaser stating this.

If this is not the intended use, the purchaser who unduly benefits from the exemption commits a serious specific tax infringement punishable by a proportional fine of 150% of the tax not paid and a minimum amount of 1,000 euros.

Finally, the law also regulates cases of deduction: In the case of intra-Community purchaser, the tax paid on the intra-Community acquisition may be deducted when the products purchased:

• They are sent outside Spanish territory.
• They are destroyed or rendered unsuitable for use before they are first delivered or made available in Spanish territory.
• They are returned, after their delivery or making available in Spanish territory, after reimbursement of the amount paid to the purchaser in Spanish territory.

In the case of a manufacturer, the tax paid on the delivery or making available in Spanish territory of the products manufactured may be deducted when the products:

• Are returned for destruction or reincorporation into the manufacturing process, after delivery or making available in Spanish territory, after reimbursement of the amount thereof to the person acquiring them in Spanish territory.

In both cases, the deduction can be exercised in the self-assessment corresponding to the settlement period in which the circumstances giving rise to the deduction occur, reducing the tax due in that settlement period. If the amount of the deductions exceeds the amount of the instalments accrued in the settlement period, the following options are available:

• Offset the excess in subsequent self-assessments within four years of the end of the settlement period in which the excess occurred, or
• request a refund of the balance in their favour in the self-assessment corresponding to the last settlement period of the calendar year.

On the other hand, in the case of being an importer, by submitting the form provided for this purpose, you may request a refund of the tax paid on importation, when the imported products:

• They are sent outside Spanish territory, by the importer or by a third party in his name or on his behalf.
• They are destroyed or become unsuitable for use if the destruction or unsuitability is prior to the first delivery or making available of the products in Spanish territory.
• They are returned, after being delivered or made available in Spanish territory, after reimbursement of the tax to the purchaser in Spanish territory.

In the event that the purchaser in Spanish territory does not hold the status of taxpayer, by presenting the form provided for this purpose, he may apply for a refund of the tax paid on the acquisition when the products purchased:

• They are sent outside Spanish territory.
• They are single-use plastic containers and are intended for the packaging of medicines, medical devices, foodstuffs for special medical uses, infant formula for hospital use or hazardous waste of medical origin.
• These are semi-finished plastic products and are intended for the production of single-use plastic packaging for medicinal products, medical devices, foodstuffs for special medical purposes, infant formulae for hospital use or hazardous waste of medical origin.
• They are plastic products and are intended for the closure, marketing or presentation of single-use plastic packaging of medicinal products, medical devices, foodstuffs for special medical purposes, infant formulae for hospital use or hazardous waste of medical origin.
• They are modified and can be reused.
• They are semi-processed plastic products and are not intended for the production of non-reusable packaging containing plastic.
• are products containing plastic and are not intended to enable the closure, marketing or presentation of non-reusable packaging containing plastic.

It should be noted that the form for requesting the refund will be form A22 “Special tax on non-reusable plastic packaging.

Request for refund”, still pending approval. It should also be borne in mind that the form for requesting the refund does not coincide with the approved form for declaring the taxable event.

Finally, it is recommended that in the case of applying any of the aforementioned tax benefits, the documentation supporting the fact that justifies it should be kept during the limitation period. In the case of deductions and refunds, you should also keep the supporting documents proving payment of the tax.

Formal obligations

At a formal level, the following obligations arise:

• Taxpayers are obliged to file a tax return (Form 592) including the tax due and pay the tax debt.

The settlement period is monthly or quarterly, depending on the VAT settlement period, taking into account the volume of transactions or other circumstances provided for in the tax regulations.

A Ministerial Order, pending approval, will regulate the self-assessment and refund application forms, the filing deadlines and, where applicable, the exceptions to this obligation.

In cases of importation of products subject to the tax, the tax shall be settled by customs in accordance with the provisions for customs debt in the customs regulations.

• Register registration: If you are obliged to register in the territorial register of the special tax on non-reusable plastic packaging, you must apply for registration prior to the start of your activity.

Application for registration must be made within thirty calendar days of the entry into force of the Ministerial Order regulating the aforementioned register, even if it is still being processed.

Without prejudice to the foregoing, registration may be requested from 1 December 2022. Said registration, if applicable, shall take effect as from 1 January 2023.

A Ministerial Order, pending approval, will regulate the census of taxpayers in which taxpayers must register, the registration procedure and, if any, the exceptions to this obligation.

Failure to register while obliged commits a specific serious tax offence punishable by a fixed fine of 1,000 euros.

• Intra-Community manufacturers and purchasers of products subject to the tax must keep accounts of the products manufactured.

A Ministerial Order, pending approval, will regulate the procedure and deadlines for compliance with this obligation and, if any, the exceptions to this obligation.

• The obligation for the manufacturer to pass on the tax on the products sold or delivered in Spanish territory.

The invoice shall state, separately, the amount due, the kilograms of non-recycled plastic contained in the product and whether any exemption applies, specifying the precept in which it is regulated.

In subsequent sales or deliveries made in Spanish territory of the products subject to the tax, those making the sale or delivery must state on the invoice (or certificate), separately, the tax due, the kilograms of non-recycled plastic contained in the product and whether any exemption applies, specifying the provision in which it is regulated.

This obligation must only be fulfilled when so requested by the purchaser of the product and shall not be required when simplified invoices are issued.

In the event of incorrect entry of the required data on the invoice or certificate, the obligor commits a specific serious tax infringement, which is punishable with a fixed fine of 75 euros per invoice or certificate issued with incorrect entry.

Finally, taxpayers not established in Spanish territory are obliged to appoint a representative before the Tax Administration in relation to their tax obligations.

The appointment must be made prior to the first transaction constituting a taxable event.

In the event of failure to appoint a representative, the obligor commits a specific serious tax infringement punishable by a fixed fine of 1,000 euros.

In turn, the representative is obliged to register in the territorial register prior to the first transaction constituting the taxable event.

In the event of starting his activity prior to 1 January 2023, the date of entry into force of the tax, the representative must register within thirty calendar days of that date. In the event of failure to register, the obligor commits a serious specific tax infringement punishable by a fixed fine of 1,000 euros.

A Ministerial Order, pending approval, will regulate the census of taxpayers in which representatives must be registered and the registration procedure.

Once the representative has been registered in the territorial tax register, the represented party does not have to register. It is you as the representative who, with the CIP assigned to you by the managing office with the RP activity code, will fulfil all the tax obligations arising from the tax on behalf of the principal.

Given the practical complexity of this new tax, AddVANTE and ECOGESA remain at your disposal to help and advise you on taxation and processes.

Furthermore, given the many doubts on essential elements of the regulation that are being generated from the analysis thereof, together with the fact that the approval of the ministerial orders regulating the models is still pending, we would like to inform you that we will monitor this issue to keep you informed.

Finally, we would like to announce the scheduling of a webinar on this matter during the first weeks of January 2023 in order to address issues arising from the regulation both from the tax point of view and from the point of view of processes to be taken into consideration.