BMF (Austrian Federal Ministry of Finance) on value added tax on one-way packaging
The BMF confirms that deposits on one-way packaging are not part of the taxable base for Value Added Tax (VAT) purposes for the concerned beverage deliveries and are therefore not subject to VAT. Also, returning the deposit amounts when returning the one-way beverage packaging is not subject to VAT.
Description
As of 1 January 2025, placing commercial one-way beverage packaging made of plastic or metal with a filling volume from 0.1 up to 3 litre on the Austrian market is subject to a deposit in the amount of EUR 0.25 per packaging. The one-way deposit amounts will be collected and paid out on behalf and for the account of EWP Recycling Pfand Österreich gemeinnützige GmbH (“EWP”).
Assumingly, the amounts related to the deposit are separately stated on the invoice or till receipt of the final distributor. The bill or till receipt does not include an explicit reference that the one-way deposit is charged on behalf or for the account of EWP.
VAT evaluation of the BMF
One-way deposit amounts are not qualified as services subject to VAT, because one-way deposits do not constitute an exchange of service. Therefore, one-way deposit amounts are considered as out-of-scope of VAT. Therefore, the collection of the one-way deposit amounts as of 1 January 2025 on behalf and for the account of the EWG is not subject to VAT at EWG.
Final distributors of one-way beverage packaging must take them back from the end consumers against repayment of the deposit of EUR 0.25 per packaging. The repayment is charged on behalf and for the account of EWB, which in turn has to monthly refund to all registered entities obliged to take back the packaging the deposit amounts paid out by them. Returning the deposit amounts is also not subject to VAT, because they have the function of a guarantee and should increase the return rate of the emptied one-way beverage packaging.
The difference that is withheld, if the end consumers do not return the one-way beverage packaging, remains at EWP and will be used for operating the collection and recycling system. Thus, also these differences are not subject to VAT, because these differences do also not constitute an exchange of service which is subject to VAT between EWP and end customers or other service recipients.
In summary, it thus follows that neither the collection nor the repayment or the amounts of difference in connection with the one-way deposit amounts are considered as being subject to VAT in accordance with section 1 para. 1 subsec. 1 UStG (Austrian Valued Added Tax Act).
Because the one-way deposit amounts do not qualify as being subject to VAT, a separate label that the deposit amounts are collected and returned on behalf and for the account of EWP, is not necessary. However, to avoid tax liability by virtue of invoicing, it is necessary for the deposit amount to be stated separately from the actual payment and that on this invoice no VAT is shown for this amount.
Note that reusable deposit bottles (for example water bottles made of glass) are considered an ancillary service to the main service (for example delivery of water) and are therefore indeed subject to VAT.
