New sugary drink tax in Poland

published on 11 November 2020 | Reading time approx. 5 minutes

In January 2021, a food-related fiscal policy in Poland will be updated. The update, often referred to as “soda tax”, introduces additional fees for sugary drinks and small alcoholic beverages. It applies to products with added sugar, caffeine, or taurine, and to alcoholic beverages packed in containers with capacity not exceeding 300 ml. The Polish Federation of Food Industry expects a beverage price increase of up to 40 per cent.

Sugary drink policy update

While the alcoholic beverages fee is processed mostly via existing channels and applies to wholesale license suppliers, the sugary drink fee is a new type of tax that requires more substantial updates. It affects

all physical and legal persons that sell sweetened beverages to retailers,
entities that conduct retail sales as food producers,
intra-community supply of goods suppliers,
importers, and the ordering parties that outsource the production of sweetened beverages.

The new regulations oblige aforementioned entities to submit new declarations to the relevant tax office. The declaration shall include, inter alia, the amount of liters of sold sweetened drinks and manufacturer’s batch numbers. The fee is payable by the 25th day of the month following the month to which the declaration relates. Failure to comply with the fee payment renders the entity liable to a fine equal to 50 per cent of the total fee.

Sugary drink fees

The new regulation applies to sugary drink beverages with added monosaccharides, disaccharides or foodstuffs containing these substances, as well as sweeteners (see Regulation (EC) No 1333/2008 on food additives for details). The basic sugary drink fee is 0,11 Euros (0,5 Złoty) per 1,000 ml. Additionally, an extra fee of 0,01 Euros (0,05 Złoty) for each gram of sugar beyond the limit 5 g/100 ml is established. Also, another fee is applied to drinks containing caffeine or taurine; it is equal to 0,02 Euros (0,1 Złoty) per 1,000 ml. The total amount of soda fee cannot exceed 0,26 Euros (1,2 Złoty) per 1,000 ml.

The sugary drink fee does not apply to

medical devices,
food supplements,
infant formulas,
follow-on formulas,
food for special medical purposes,
excise products,
carbohydrate-electrolyte solutions with maximum sugar content of 5 g/100 ml,
products with content of no less than 20 per cent of fruit or vegetable juice with max. sugar content of 5 g/100 ml, and
products in which milk or dairy products are mentioned first in the ingredients list.

Moreover, carbohydrate-electrolyte solutions and products with a content of no less than 20 per cent of fruit or vegetable juice, which exceeds the 5 g/100 ml sugar limit are not charged with the basic fee of 0,11 Euros per 1,000 ml.

Small alcoholic beverage fee

Another fee is introduced for alcoholic beverages packed in containers with a capacity not greater than 300 ml. All such beverages shall be charged with an additional fee of 5,5 Euros (25 Złoty) per 1,000 ml of 100 per cent alcohol content in the product. The fee is paid by the supplier, i.e. the entity possessing the wholesale license for the underlying alcoholic beverages. The suppliers are also obliged to provide updated information to the relevant tax office. In particular, the updated tax declaration should include the exact amounts of sold quantities to which the new fee is applied. Failure to comply with the reporting obligation renders the suppliers liable to a new fine of up to 2,500 Euros (11,250 Złoty).

Conclusion

The main aim of the new tax is to promote healthy choices among consumers. Still, the exact health benefits imposed by the food-related fiscal policy update are not comprehensively justified. Moreover, the Polish government introduced the update regardless of its previous declarations made in reference to the new tax introduction. Note that the regulation uses the term “fee” instead of “tax” despite the fact that it is paid directly to the relevant tax office and requires a declaration. This might create unnecessary legislative ambiguity. One certain impact of the regulatory update relates to final consumer prices. The Polish Federation of Food Industry expects a beverage price increase of up to 40 per cent.