Plastic Tax: Germany

Until now, Germany has lacked an implementation or new levy in the form of a “plastic tax” or levy on entre­preneurs or consumers, so that the contribution made to the EU would not only be paid from the state budget. In 2021, Germany transferred about EUR 1.3 billion from the state budget to the EU as part of the plastics levy. A levy of the plastic levy on producers/consumers was described in the coalition agreement of the current German Federal Government in December 2021 (“The plastic levy already existing within the framework of the EU will be passed on to producers and distributors as in other European countries.”), but without any indication of the exact form and concrete timetable for implementation.

 

With the draft of the federal government, packaging law is intended to create an obligation to offer food for immediate consumption in disposable plastic packaging and beverages in to-go cups, also in reusable packaging as an alternative taxation of these disposable products had already been introduced by the German city of Tübingen with its levy of a local tax and failed due to the lack of competence to introduce it – as the Packaging Act is a closed system that precludes an additional regulation by the municipal legislator is due to the municipal tax levy. 

 

On 11 May 2023 (published in the Federal Law Gazette on 15 May 2023), the German Federal Government has now passed a Single-Use Plastics Fund Act (so-called Einwegkunststofffondsgesetz – EWKFondsG) to imple­ment a national single-use plastics levy as a special charge. It is intended to avoid and reduce the impact of single-use plastic products on the environment, in particular the marine environment, and human health, to encourage entrepreneurs and consumers to be more conscious and sustainable in their use of products made of single-use plastic, at best even to switch to more sustainable products, as well as to promote innovative and sustainable business models, products and recyclable material.

 

Yes, on an EU level via the Decision, EU, Euratom 2020/2053 of the EU Council of December 14, 2020.

  

Final version of the German federal government for a law to implement requirements of the Single-Use Plastics Directive and the Waste Framework Directive in the Packaging Act and other laws, adopted on 20 January 2021, serves to implement provisions from the amended Waste Framework Directive 2008/98/EC and the Single-Use Plastics Directive (EU) 2019/904 and will come into effective on 1 January 2023. Further reporting requirements and also a levy are already implemented now in parallel according to a Single-Use Plastics Fund Act (so-called Einwegkunststofffondsgesetz – EWKFondsG) to implement a national single-use plastics levy as a special charge. 

  

Currently, until end of 2023 it will be considered more as a levy which will be paid monthly from the respective national German budget and is thus not a tax in the proper meaning as a burden and tax declaration obligations for respective taxable persons. Starting from 2024 there will be assessed on a yearly bases after respective annual reporting a levy. 

 

The German government's coalition agreement dated 7 December 2021 states that the EU plastic tax already within the framework of the EU will be passed – as a plan of the current government – on to manufacturers and distributors, as it is the case in other European Member States. This is adopted in the new law Einwegkunststofffondsgesetz – EWKFondsG.

  

Starting 1 January 2021, the contribution is calculated by the weight of non-recycled plastic packaging waste with a uniform rate of EUR 0.80 per kilogram of non-recycled plastic packaging waste generated in the respec­tive EU Member State.

  

The quantity is defined by the amount of non-recycled packaging waste as the difference between the weight of packaging waste generated in a year and the amount recycled in the same year.

  

Contributions are calculated on the basis of Eurostat data already collected and provided by Member States in accordance with existing reporting obligations. More specifically, EU Member States already provide data on the generation and recycling of plastic packaging waste in accordance with the Packaging and Packaging Waste Directive (Directive 94/62/EC) and its implementing decision (Decision (EU) 2019/665).

 

The new law regulates the product responsibility of manufacturers of single-use plastic products in the sense of extended producer responsibility (EPR). According to the present EPR, manufacturers, i.e. first distributors of single-use plastic products and products containing plastics, will in future be obliged to pay a certain amount – depending on the quantity (type and mass) of single-use plastic products first made available or sold on the market – into a state single-use plastic fund administered by the Federal Environment Agency. 

 

The levies collected in the single-use plastic fund are used to cover the costs incurred for the services provided by the authorities and the other legal entities entitled to claim.

 

The Act covers in particular

 

Manufacturers of these products must register with the Federal Environment Agency before starting their activities from 1 January 2024. The Federal Environment Agency will set up an information technology system for this purpose and open access on its website. Producers who have already commenced their activities before 1 January 2024 have to register by 31 December 2024 at the latest.

 

The Act defines a manufacturer as any producer, filler, seller or importer established in Germany who makes disposable plastic products available on the market for the first time on a commercial basis. Distance selling is also covered. Persons/companies not resident or established in Germany who commercially sell single-use plastic products directly to private households or other users by means of distance communication in Germany are also covered.

 

Non-recycled plastic packaging waste.

 

From 1 January 2025, the producers of single-use plastic products will have to pay an annual special levy, which will be determined by a levy notice. In order to avoid penalties, the affected party should already be analysed now in order to be able to fulfil the related obligations in due time.

This results in the following obligations for trading companies:

 

From 1 January 2024, a registered expert within the meaning of the Packaging Act or an auditor, tax advisor or sworn accountant shall verify the annual quantity reports of manufacturers on single-use plastic products they place on the market. The reports must be submitted to the Federal Environment Agency.

 

The confirmation shall be provided with a qualified electronic signature pursuant to section 2 of the Signature Act and shall be transmitted electronically by the manufacturer to the Federal Environment Agency together with the data notification and the test report.

 

This is similar to the audit pursuant to Section 11 German Packaging Act. Pursuant to the new Single-Use Plastics Fund Act, the Federal Environment Agency must – as foreseen in Packaging Act – develop so-called audit guidelines to be observed by the reviewer. The explanatory memorandum to the Act assumes that the content of these can be based on the test guidelines for Section 11 of the German Packaging Act.

 

Section 10 para. 4 of the new Act contains a threshold value of 50 kilograms; below this quantity of single-use plastic products, testing is unnecessary. This would mean that even the smallest distributors would have to be audited. It remains to be seen whether adjustments will be made here in the course of the legislative process and the further implementation in the reporting portal then envisaged.

 

In Germany, for example, the new reporting requirements are those that are already and still have to be reported under the Packaging Act (in German Verpackungsgesetz – VerPackG) via the German packaging register LUCID and then additionally now via the newly planned reporting system of the Federal Ministry of Economics. As auditors or tax consultants, for example, they can take over the audits of the reports that an entrepreneur who is obliged to report must submit himself, after receiving the appropriate certification.