"Plastic tax": New challenge for companies?

In fact, this plastic tax is not a tax in the true sense of the word, but a levy from the member states to the EU. This was adopted as part of the Own Resources Decision for financing the EU budget on December 14, 2020. Since January 1, 2021, the EU member states have been obliged to pay a levy of 0.80 euros on every kilogram of non-recycled plastic packaging waste. This includes, for example, packaging materials that are not intended for subsequent further processing into products, materials or substances.

Moreover, the plastic tax is not earmarked for a specific purpose. A direct promotion of the circular economy, e.g. in order to develop new solutions for the plastics problem, is therefore not taking place at EU level through the plastic levy. Rather, the levy was originally intended to be introduced to cushion the funding gaps resulting from Brexit. In addition, it serves as an ecological control instrument and is intended to reduce plastic waste in the EU member states.

How do the member states deal with this?

The EU member states can decide for themselves how to refinance the plastic levy. The national implementation in the individual member states varies accordingly. While some countries, such as Germany, Luxembourg or Austria, finance the levy from the budget, others, especially southern European countries, have opted to pass on the expenses incurred by the levy to the private sector. Italy, for example, has decided to introduce a tax on disposable products as of January 1, 2023. The tax debtor here is basically the plastic manufacturer. However, if disposable packaging is imported into Italy from other EU countries, the foreign importer may also be liable for the tax. In Portugal, too, a tax of 0.30 euro per package is to be levied on single-use plastic packaging from July 1, 2022, and additionally on aluminum packaging from January 1, 2023.

Note: Non-EU countries also levy a plastic tax. In the UK, for example, plastic packaging made of less than 30% recycled plastic will be taxed from April 1, 2022. The tax applies to filled and empty packaging produced in the UK or imported to the UK. All companies that import or manufacture more than 10 tons of such plastic packaging in a 12-month period are subject to the tax.

In addition to these plastic taxes that have already been passed, future taxation of packaging is expected in other EU countries.

The plans of the new federal government

In Germany, the plastic levy is currently paid from the federal budget, i.e. from general tax revenues. So far, the contribution has not been apportioned to the private sector. However, according to the new federal government's plans for a national circular economy strategy, this could soon change. According to the coalition agreement, the plastic levy is to be passed on to manufacturers and distributors, as in other European countries. It is not clear from the coalition agreement how such a levy is to be structured in concrete terms. In addition to an actual plastic tax, it would also be possible to pass on the costs via various incentive and tax models. It would also be conceivable to pay a contribution into a fund, which in turn would benefit the circular economy and the environment. The model of the city of Tübingen could also be used as an example. Since January 1, 2022, a packaging tax of up to 0.50 euros has been levied on disposable packaging that is used once or for a short period of time. The tax is thus aimed at packaging for "to-go consumption". The points of sale of the disposable packaging are liable to pay the tax.

As this example shows, the German government's plans affect not only the packaging industry, but also retailers, the food service industry, the consumer goods sector and other companies that use plastic packaging.

Current challenges for companies

Even though companies in Germany have not yet been made liable, there is already a need for action, particularly for companies with subsidiaries in other EU countries. As there are no plans for EU-wide harmonization of the plastic tax, the main challenge is to keep track of current developments and the associated administrative obligations in the individual member states. Another important role is to obtain data that can be used to determine and monitor the costs resulting from a plastic tax. If necessary, it may also be worthwhile to analyze the company's own supply chains and optimize them with regard to the plastic taxes incurred.