Deposit Refund System

The beverage sector includes entities placing various types of packaged beverages on the market, such as producers and importers of non-alcoholic, alcoholic, and dairy drinks.

The upcoming regulations will have a particularly significant impact on this sector, as the selective collection system will apply only to three types of used beverage packaging, including those for alcoholic, non-alcoholic, and dairy beverages. Notably, other types of packaging placed on the market – such as single-use glass bottles, liquid food cartons, etc. – will not be subject to deposit and will not be collected under the system.

Entities whose packaging falls within the scope of the deposit return system (DRS) must decide whether to:

• invest in establishing a DRS operator (becoming a shareholder), or
• join an existing operator by entering into an agreement at a later stage.

Choosing not to participate in the system would result in the obligation to pay a product fee, which may be charged at a triple rate.

It is crucial to analyse not only the costs of joining the operator, but also the costs of complying with other legal requirements – including labelling, packaging, sourcing recyclate, and implementing new logistics for reusable bottles that will be returned to the producer for refilling. Transactions such as sourcing recyclate may occur between related or unrelated parties. Where related entities are involved, it is essential to structure these transactions in line with transfer pricing rules and ensure compliance with the arm’s length principle.

For beverage producers, it will also be important to classify expenses related to joining and operating within the DRS from a tax perspective – especially to determine which costs and at what point may be recognized as tax-deductible (immediately or over time). Moreover, producers should prepare for new VAT accounting rules for packaging subject to deposit (marked accordingly), which are used to sell beverages. VAT will not be due upfront upon failure to return the packaging within the deadline, but rather at the end of the calendar year, based on the number of packages placed on the market versus those returned under the DRS. This will require the maintenance of a dedicated tax register for DRS-covered packaging. Some returnable packaging (e.g. crates, pallets) will continue to be settled under the existing regulations, outside the DRS, meaning that an analysis of packaging types used is essential for proper tax compliance.

There is also controversy surrounding the regulations stipulating that VAT on unreturned packaging should first be settled by the DRS operator as the taxpayer, and then by the producer in their VAT return. Accurate tax calculation will require close cooperation between these two parties, although no formal legal framework for such cooperation has been established. It is therefore advisable to regulate these matters contractually in the agreement with the operator.

From the operator’s perspective, one of the key issues will be the correct tax treatment of revenues from unclaimed deposits and the sale of recycled materials, as well as the accurate allocation of operating costs related to the DRS. For settlements between producers and the operator, especially in the case of related parties, the content of contractual arrangements will be crucial. If the operator is financed by its founding members, it is necessary to ensure that any remuneration is set at market level – this applies to transactions such as loans and also guarantees issued for the benefit of external banks.