Proposal of a new tax on non-reusable plastic containers and packaging

The proposals in the draft Bill on waste and contaminated soil are aimed at two objectives: (i) more generally, to establish measures designed to protect both the environment and human health and (ii) more specifically, to prevent and reduce the impact of certain plastic products. To this effect, the draft Bill transposes the 2018 Directive on waste and the 2019 Directive on single-use plastic products. In this regard and for the first time, Spanish law imposes limitations on single-use plastics by (i) limiting the market access to such products and (ii) creating a new indirect tax on non-reusable plastic containers and packaging, the main features of which are summarised hereafter.

The draft Bill (the "Draft Bill") on waste and contaminated soil has included the future new indirect tax on non-reusable plastic packaging in its Title VIII, with a view to avoid waste. Avoidance is the preferred option under waste hierarchy principles, since the best waste is no waste. Waste hierarchy principles must govern waste policy and are key to the circular economy.

The tax is proposed against this backdrop as an indirect tax on the manufacture, import or intra-community acquisition of non-reusable plastic containers and packaging introduced in the Spanish market. Therefore, manufacturers, importers or recipients of intracommunity acquisitions will be liable for this tax.

The object of the proposed tax is "non-reusable plastic containers or packages", used to contain liquid or solid products or to wrap goods or food products. The tax is also aimed at other plastic containers or packaging, as defined in Law 11/1997, dated 24 of April, on packaging and packaging waste.

Under the Draft Bill, "non-reusable containers" would be all those which cannot be deemed to be reusable, whereas "reusable containers" would include any container, conceived, designed and marketed to perform multiple circuits or rotations during its life cycle. Reusable containers may be re-filled and re-used for the same purpose for which they were conceived.

The proposed tax would exempt the manufacture, import and intra-community acquisition of:

(i) such non-reusable plastic containers and packaging shipped or transported directly by manufacturers, importers or recipients of intracommunity acquisitions to a State or a country other than Spain.
(ii) any non-reusable plastic containers and packaging which is destroyed, prior to the end of the period established for filing the tax return.
(iii) any non-reusable packaging used as the primary packaging for medicine.

The tax base will be calculated as the quantity, expressed in kilograms, of plastic contained in the packages and containers covered by the tax. Tax base reductions are proposed to take into account, for instance, the amount of plastic from Spanish-market recycling sources incorporated in the manufacturing process.

The tax debt will be calculated by applying a fixed rate of 0.45€ per kilogram to the tax base.

The Draft Bill also includes some general rules governing the management of the tax. Under these rules, taxpayers will be liable to self-assess and pay the tax, on a quarterly basis, during the 20 first calendar days of the second month following each quarter. Imports will follow Customs rules.

Taxpayers will be under the duty to register in a territorial registry relating to this tax within the 30 calendar days following the entry into force of the law, should the Draft Bill be approved. Moreover, manufacturers will be subject to specific accounting obligations, such as the electronic record-keeping of raw materials and containers. Additionally, recipients of intra-community acquisitions must keep an electronic record of stocks.

One of the difficulties of this future indirect tax will be how to determine its objective scope, since the wording of the Draft Bill seems particularly far-reaching. Moreover, the tax raises certain issues, from an economic perspective, such as whether the final cost of the product will increased or whether and to whom the costs of such tax may be passed on. How companies may manage this tax in the future and the costs associated to it remains to be seen.

The entry into force of the tax is planned for July 1 2021.