Spain - Binding rulings clarify scope of new plastic packaging tax

Spain’s tax authorities have already issued 18 binding rulings on the new special tax on non-reusable plastic packaging (PPT) that became effective on 1 January 2023 (for prior coverage, see the item in the Bytes column in the January 2023 issue of Indirect Tax News and the article in the January 2022 issue). It quickly became clear that ambiguities in the statutory language created some confusion, and Spanish PPT payers requested binding rulings from the tax authorities to obtain clarity on the PPT treatment of their business activities.

The PPT, which aims to discourage the production and use of non-reusable plastic, transposes into Spanish law two EU directives that focus on reducing the impact of certain plastic products on the environment. The PPT applies to packaging containing plastic, regardless of whether the packaging is empty or used to contain, protect, handle, distribute or display goods to be used in the Spanish market. The taxable amount is the quantity (expressed in kilograms) of non-reusable plastic and the tax rate is EUR 0.45 per kilogram. Several exemptions from the PPT are available. The taxpayer is the manufacturer, the importer into the EU or the acquirer of the intra-EU acquisition of the packaging.

The following are highlights of the takeaways from the rulings:

  • Artificial casing used in the manufacturing of sausages falls within the scope of the PPT. The tax authorities have confirmed that since the casing is designed to contain, protect, handle, distribute and display goods and none of the exceptions are applicable, the PPT applies.
  • The plastic cap used for closing brick containers falls within the scope of the PPT where it is intended to allow the closure, marketing or display of a non-reusable container.
  • Plastic packaging manufactured with “biodegradable plastic,” as well as garbage bags, preservation film and freezer bags sold in shops as finished articles for domestic use, fall within the scope of the PPT.
  • Plastic pods/capsules used for coffee machines that are integral to holding the product (i.e., coffee) and that are disposed of with the used coffee grounds fall within an exemption to the PPT.
  • Where a Spanish food packaging company purchases non-reusable plastic containers from a Spanish manufacturing company and then sells the packaged products to customers, the manufacturing company rather than the packaging company is the taxpayer, but the packaging company must comply with certain PPT obligations, e.g., issue a certificate to the purchaser of the packaged food detailing the total amount of the tax paid and the kilograms of plastic in the goods.
  • Several rulings were issued on non-food-related issues: the importation or EU acquisition of raw materials protected by plastic that ends up as waste, the manufacture of polystyrene foam packaging for the protection of electronic equipment and the importation of “Big Bags” are all subject to the PPT. The authorities did clarify that if the plastic packaging is re-usable, it will fall outside the scope of the tax.
  • Where a company requests a refund of the PPT paid because a product subject to the tax is exported but the goods are subsequently returned, the second delivery of goods is considered an importation and, therefore, is a taxable event for purposes of the PPT.

Despite the clarifications of certain aspects of the PPT in the binding rulings, more rulings are likely to be issued in the coming months.

Alvaro Gómez Elvira
Cristina Sanchez Gomez
BDO in Spain