BMF: No VAT on one-way deposit
The Federal Ministry of Finance (BMF) confirms that deposits on one-way deposits are not part of the taxable amount for the beverage deliveries in question and are therefore not subject to VAT. The same applies to the payment of the deposit by the recipient when returning the non-returnable drinks packaging.
1. Regulation from 01.01.2025
From 1 January 2025, anyone who places single-use beverage containers made of plastic or metal with a filling volume of 0.1 to 3 litres on the market on a commercial basis is obliged to collect a deposit of EUR 0.25 per container from the respective customer in the name and for the account of the so-called ‘Central Agency’.1
Commercial distributors include, in particular, beverage producers, importers and distributors, food retailers and catering businesses.
The ‘Central Agency’ within the meaning of this provision is EWP Recycling Pfand Österreich gemeinnützige GmbH (EWP), which will create a central collection and recycling system for the beverage packaging covered by Sec 4 of the One-Way Deposit Ordinance (Einwegpfand-VO) by the time the one-way deposit comes into force. In accordance with the provisions of the One-Way Deposit Ordinance, the one-way deposit will be collected via the retail chain from the first distributor (beverage producer or importer) to the end consumer in the name and for the account of the EWP. The respective first distributor must forward the amounts collected via the chain to EWP at least monthly.
When consumers return the disposable packaging, they receive the deposit paid back from the respective recipient in the name and for the account of EWP. The recipients will be reimbursed by EWP for the deposit amounts they have paid out.
2. Questions
What are the VAT consequences of:
- collected deposit amounts,
- the return of deposit amounts and
- the difference between the deposit amounts collected and the deposit amounts paid out to commercial distributors?
3. Information from the BMF
In future, commercial distributors of one-way beverage containers must collect a deposit of EUR 0.25 per container from the respective customer in the name and for the account of the central office and transfer it to the latter on a monthly basis.2
Since the deposits received are not based on any taxable services provided by the central office to the distributors or other customers, the deposit amounts do not constitute taxable service charges either and are not subject to VAT at the ‘Central Agency’ level.
Final distributors of single-use beverage containers subject to a deposit must take these back from the final consumer and refund the deposit of EUR 0.25 per container. The deposit is also refunded in the name and for the account of the ‘Central Agency’, which must reimburse all registered take-back obligors for the deposit amounts they have paid out on a monthly basis. The deposit amounts are repayable upon return of the packaged items on which a deposit has been paid and therefore have the function of a security deposit, which – in line with the purpose of the ‘Central Agency’ – is intended to influence behaviour and increase the rate of return of the emptied single-use beverage containers.
The repayment of deposit amounts does not constitute a taxable transaction either. Since final consumers do not get the deposit amount they paid refunded if they do not return the single-use beverage containers, the difference between the deposit amounts collected and paid out for returned single-use beverage containers (‘deposit slip’) remains with the central office and is used to operate the collection and recycling system. Since neither the collection nor the return of the deposit amounts to the ‘Central Agency’ takes place in the context of a taxable supply of goods or services, the deposit amounts remaining with the central office due to the lack of return of packaging by customers (‘deposit slip’) are also not subject to VAT, because these are not offset by any service provided by the ‘Central Agency’ to the end customer or other service recipient.
Summary
In summary, it should therefore be noted that the deposit amounts collected in the context of operating the collection and recovery system (deposit system for non-refillable bottles) are not fees for taxable supplies within the meaning of Sec 1 (1) (1) of the Austrian VAT Act 1994 (UStG 1994). In order to avoid a tax liability by virtue of invoicing, it is necessary – provided that the deposit amount is stated in the invoice – for it to be listed separately from the consideration.3 It is not necessary to indicate that the deposit amounts are collected and disbursed in the name and for the account of the ‘Central Agency’ and spent is not required, especially since the deposit amounts collected are not fees for taxable transactions within the meaning of Sec 1 (1) (1) of the Austrian VAT Act 1994 (UStG 1994).
- Pursuant to Sec 4 of the One-Way Deposit Ordinance (Einwegpfand-VO), Federal Law Gazette II No. 283/2023 in conjunction with Sec 14c of the Waste Management Act 2002, Federal Law Gazette I No. 102/2002 as amended.
- Pursuant to Sec 4 of the Deposit Ordinance for single-use beverage containers (Pfandverordnung für Einweggetränkeverpackungen), Federal Law Gazette II No. 283/2023.
- See the 2000 Value Added Tax Guidelines (Umsatzsteuerrichtlinien 2000 – UStR 2000), GZ 09 4501/58-IV/9/00 as amended by GZ 2023-0.877.675 of 15 December 2023, Rz 656.