Environmental Product Charge, 2013

Product charge rates

The rates of product charges payable from 2013 were not changed (the taxpayers applying special waste disposal pay product charges at reduced rates – their obligations are regulated in a separate legal regulation):

Packaging supplies (with the exception of commercial packaging supplies):

Commercial packaging supplies:

Advertising paper:

Tyres:

Other oil products:

Batteries:

Electric and electronic equipment:

We have to note that no product charge is payable for reusable packaging supplies if the product for which the product charge would be payable is included in the list of reusable packaging supplies and the packaging company applies a deposit on these. Companies can save a lot on reusable packaging supplies if they implement the appropriate processes.

In addition to the payment of product charge, companies may also have an obligation of supplying data on waste management. Although, in the case of electronic products, if the manufacturer fulfils the obligations regarding waste disposal by collective performance through the National Waste Management Agency (NWMA),data is supplied to the National Inspectorate for Environment, Nature and Water by NWMA, the data supply obligation still applies in the case of packaging. Data must be supplied to the Inspectorate until January 31 covering aggregate data relating to the waste disposal of the current year.

Product charge return

Similarly to other tax types, the concept of advance payment was introduced last year for product charge also. The companies obliged to pay product charge must assess, declare and pay the product charge advance for the fourth quarter of the current year. The rate of the product charge advance is 80 percent of one third of the total product charge paid for the first three quarters of the current year. The obligation of filing a return is fulfilled in respect of the advance by the filing of the return for the fourth quarter (until the 20^th of the month following the current quarter). Payment is due until December 20 of the current year. In the return for the fourth quarter of the current year, the product charge advance must be supplemented to the actual amount payable or the difference may be reclaimed.

Assumption of product charge payment obligation

An important change from 2013 is that the possibilities for the assumption in contract of the product charge payment obligation were extended:

1. the first domestic buyer if at least 60 percent of the products purchased from the party obliged to pay product charge were sold to abroad;
2. contract manufacturer;
3. in the case of packaging supplies, the first domestic buyer reselling such packaging supplies in unchanged form and condition or in another packaging form;
4. the first domestic buyer of packaging supplies,
5. the domestic buyer of packaging supplies in the supplies under point 3
6. if packaging is manufactured from such packaging supplies;

in the case of packaging materials

1. the first domestic buyer,
2. the domestic buyer in the supply under point 3

using such packaging materials for the manufacturing of packaging materials, packaging instruments or packaging supplements processed further in terms of material, size and appearance.

1. in the case of the packaging material under the customs tariff code 3920
2. the first domestic buyer or
3. the domestic buyer in the supply under point 3

reselling such packaging material in unchanged form and condition or in another packaging form in retail trade.

 Based on the amendment (point 3),the reseller of the packaging supplies (e.g. a wholesaler) may assume the fulfilment of the product charge payment obligation from the manufacturer/importer if it sells the packaging supplies in unchanged form or perhaps in another packaging form. The wholesaler’s firs buyer may also assume the obligation from the wholesaler if it uses the packaging supplies for packaging or if it uses the packaging material for the production of other packaging supplies. The packaging material may, however, also be used for the manufacturing of other packaging materials or packaging supplements.

Failure of registering for environmental product charge purposes

If an enterprise fails to fulfil its registration or any other obligation relating to the product charge, the tax authority imposes a default penalty of up to HUF 500 000.

There are still a large number of companies who are not fully informed with regard to the environmental product charge. Many do not deal with this obligation at all although there are only few companies nowadays who do not prepare company brochures or other publications. We also often identify errors in invoicing to which attention should and must be paid as the tax authority also checks these. We can be certain that from 2013, NAV will scrutinize the payment of product charges and the fulfilment of relating taxpayer obligations.